As filed with the Securities and Exchange Commission on November 26, 1997.
Registration No. _____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPSS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2815480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
444 North Michigan Avenue, Chicago, Illinois 60611
(312) 329-2400
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Edward Hamburg
Executive Vice President, Corporate Operations, Chief Financial Officer,
and Secretary
SPSS Inc.
444 North Michigan Avenue
Chicago, Illinois 60611
(312) 329-2400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
T. Stephen Dyer, Esq.
Ross & Hardies
150 N. Michigan Avenue
Chicago, Illinois 60601
(312) 558-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.|X|
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Each of Amount to be Offering Price Offering Registration Fee
Securities to be Registered Registered Per Unit (1) Price(1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,031,951 $22.6875 $23,412,388 $7,094.66
</TABLE>
(1) Solely for the purpose of calculating the registration fee, the
offering price per share, the aggregate offering price and the amount
of the registration fee have been computed in accordance with Rule
457(c) under the Securities Act of 1933, as amended. Accordingly, the
price per share of Common Stock has been calculated to be equal to the
average of the high and low prices for a share of Common Stock as
reported by the Nasdaq National Market on November 20, 1997, which is a
specified date within five business days prior to the original date of
filing of this Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
The information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION NOVEMBER 26, 1997
PROSPECTUS
1,031,951 Shares
SPSS INC.
Common Stock
($.01 Par Value)
This Prospectus relates to the offer and sale of up to 1,031,951 shares
of the common stock, $.01 par value (the "Common Shares" or "Common Stock"), of
SPSS Inc. (the "Company"). The Common Shares may be offered by particular
stockholders of the Company (the "Selling Stockholders") or persons who are
recipients of gifts made by Selling Stockholders ("Donee Stockholders") from
time to time in transactions on the Nasdaq National Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Stockholders or Donee Stockholders may effect such transactions by the sale of
the Common Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders, Donee Stockholders and/or the purchasers of the Common
Shares for whom such broker-dealers may act as agent or to whom they may sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). The Selling Stockholders, Donee Stockholders
and any broker-dealer who acts in connection with the sale of Common Shares
hereunder may be deemed to be "underwriters" as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), and any commission
received by them and profit on any resale of the Common Shares as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act. See "Selling Stockholders" elsewhere in this Prospectus. The
Company will not receive any of the proceeds from the sale of the Common Shares
by the Selling Stockholders or Donee Stockholders.
The Company's Common Stock is traded and quoted on the Nasdaq National
Market under the symbol "SPSS." On November 25, 1997, the last sale price of the
Common Stock, as reported on the Nasdaq National Market, was $23 7/8 per share.
The Company will bear all expenses (other than underwriting discounts
and selling commissions, and fees and expenses of counsel or other advisors to
the Selling Stockholders and Donee Stockholders) in connection with the
registration of the shares of Common Stock being offered hereby, which expenses
are estimated to be approximately $60,000. See "Selling Stockholders" elsewhere
in this Prospectus.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November ___, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company, and the Registration
Statement of which this Prospectus forms a part, the exhibits and schedules
thereto and amendments thereof, may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the regional offices
of the Commission located at 7 World Trade Center, 13th Floor, New York, New
York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. The Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants, like the Company, that file electronically
with the Commission and the address of that Web site is "http://www.sec.gov".
The Company's Common Stock is quoted on the Nasdaq National Market, and
therefore such reports, proxy statements and other information can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., 3rd Floor, Washington, D.C. 20006.
Additional information regarding the Company and the shares offered
hereby is contained in the Registration Statement on Form S-3 and the exhibits
thereto (collectively, the "Registration Statement") filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits thereto, to which reference is hereby made. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is hereby made to the exhibit for a more complete description of the
matter involved, and each such statement will be deemed qualified in its
entirety by such reference. For further information with respect to the Company
and the shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement, and the exhibits thereto.
SPSS, Categories, SYSTAT, Jandel Scientific, SigmaPlot, SigmaStat,
SigmaScan and SigmaGel are registered trademarks of the Company. SPSS/PC(TM)
SPSS Real Stats. Real Easy(TM), BMDP(TM), Jandel(TM), CLEAR(TM), DeltaGraph(TM),
Quancept(TM) and Quantime(TM) are unregistered trademarks of the Company. QI
Analyst(TM) is currently an unregistered trademark of the Company, but the
Company has received notification from the United States Patent and Trademark
Office that the Company may pursue further registration on a showing of use of
the trademark in interstate commerce. This Prospectus also includes trade names
and marks of companies other than SPSS Inc.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference the following documents
previously filed with the Commission:
(a) The Company's Annual Report on Form 10-K, filed March 31, 1997 for
the fiscal year ended December 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q, filed May 15, 1997
for the fiscal quarter ended March 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q filed August 14, 1997
for the fiscal quarter ended June 30, 1997;
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<PAGE>
(d) The Company's Quarterly Report on Form 10-Q filed November 14,
1997 for the fiscal quarter ended September 30, 1997;
(e) The Company's Current Report on Form 8-K and amendments thereto
filed with the Commission on October 15, 1997 (acquisition of Quantime
Limited);
(f) The description of the Company's Common Stock, $.01 par value (the
"Common Stock"), contained in the Company's Registration Statement on Form
8-A filed with Commission on August 4, 1993, pursuant to Section 12 of the
Exchange Act; and
(g) The Company's Proxy Statement, filed with the Commission on May
20, 1997, for its annual meeting of stockholders held on June 18, 1997,
except for the Compensation Committee Report contained therein.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment to the
Registration Statement, shall be deemed to be incorporated by reference in the
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person (including any
beneficial owner) to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
such information). Such requests should be directed to: Edward Hamburg,
Executive Vice President, Corporate Operations, Chief Financial Officer and
Secretary, at the Company's principal executive offices at 444 North Michigan
Avenue, Chicago, Illinois 60611, telephone (312) 329-2400.
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<PAGE>
UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES IN THIS PROSPECTUS TO "SPSS"
AND THE "COMPANY" SHALL MEAN SPSS INC. A DELAWARE CORPORATION, ITS ILLINOIS
PREDECESSOR AND ITS SUBSIDIARIES, COLLECTIVELY; AND REFERENCES TO THE "COMMON
STOCK" SHALL MEAN SPSS INC.'S COMMON STOCK, PAR VALUE $ .01 PER SHARE.
THE COMPANY
General
SPSS Inc. ("the Company") was incorporated in Illinois in 1975 under
the name "SPSS, Inc." and was reincorporated in Delaware in May 1993 under the
name "SPSS Inc." The Company is a multinational company that delivers reporting,
analysis and modeling software products, and whose primary markets are marketing
research, business analysis/data mining, scientific research and quality
improvement analysis. The Company develops, markets and supports an integrated
line of statistical software and other products that enable users to effectively
bring marketplace and enterprise data to bear on decision-making. The Company's
major products include SPSS for business and general applications, NewView for
analytical reporting, SYSTAT, SigmaPlot and DeltaGraph for scientific research,
QI Analyst for quality improvement and statistical process control, allCLEAR for
process documentation and management and the Quantime family of products for
market research. The primary users of the Company's software are managers and
data analysts in corporate settings, government agencies and academic
institutions. In addition to its widespread use in survey analysis, SPSS
software also performs other types of market research, as well as quality
improvement analyses, scientific and engineering applications and data
reporting. The current generation of SPSS desktop products features a
windows-based point-and-click graphical user interface, sophisticated
statistical procedures, data access and management capabilities, report writing
and integrated graphics. The Company's products provide extensive analytical
capabilities not found in spreadsheets, database management systems or graphics
packages.
In its 22 years of operation, SPSS has become a widely recognized name
in statistical software. The Company plans to leverage its current position to
take advantage of the increased demand for software applications that not only
provide ready access to the data that organizations collect and store, but also
enable users to systematically analyze, interpret and present such information
for use in decision-making. Management believes that ease-of-use of the
Company's current generation products, combined with the greater processing
speed and storage capacity of the latest desktop computers, has substantially
expanded the market for SPSS statistical software.
In summer 1993, the Company completed an initial public offering (the
"IPO") of common stock, $.01 par value (the "Common Stock"). The Common Stock is
listed on the Nasdaq National Market under the symbol "SPSS". In early 1995, the
Company and certain selling stockholders (the "Selling Stockholders") sold
1,865,203 shares of Common Stock in a public offering.
The Company is a Delaware corporation. The Company's principal
executive offices are located at 444 N. Michigan Avenue, Chicago, Illinois
60611, and its telephone number at its principal executive offices is (312)
329-2400.
Safe Harbor
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: With the exception of historical information, the matters discussed
in this Prospectus are forward-looking statements that involve risks and
uncertainties including, but not limited to, market conditions, competition and
other risks indicated in the Registration Statement of which this Prospectus
forms a part, and the Company's other filings with the Securities and Exchange
Commission.
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<PAGE>
Recent Developments
The Company appointed Michael Blair as a director on July 24, 1997,
filling in a vacancy on the Board of Directors of the Company.
In September 1997, SPSS acquired approximately 97% of the outstanding
shares of capital stock of Quantime Limited, a corporation organized under the
laws of England ("Quantime"), from certain shareholders and warrant holders of
Quantime, in exchange for 863,049 shares of Common Stock. In November 1997, SPSS
acquired the remaining shares of capital stock of Quantime in exchange for
28,175 shares of Common Stock. The acquisition was accounted for as a pooling of
interests. Quantime is a developer of market research software products. SPSS
will continue to operate the Quantime business principally from the Quantime
offices in London, England.
In November 1997, SPSS acquired the outstanding shares of capital stock
of In2itive Technologies, a corporation organized under the laws of Denmark
("In2itive"), in exchange for 140,727 shares of Common Stock in a merger
accounted for as a pooling of interests. In2itive is a computer software company
specializing in market research software. SPSS will continue to operate the
In2itive business principally from the In2itive headquarters in Copenhagen,
Denmark.
The financial information included herein other than in the Unaudited
Selected Pro Forma Financial Data and share amounts reflect the Company as
combined with Quantime, but does not include the In2itive acquisition, unless
otherwise indicated.
UNAUDITED SELECTED PRO FORMA FINANCIAL DATA
(in thousands, except per share data)
The unaudited selected pro forma financial data is provided as supplementary
information for illustrative purposes to give effect to the acquisitions of
Quantime and In2itive. The unaudited selected pro forma financial data gives
retroactive effect to the acquisitions of Quantime and In2itive, which have been
accounted for as poolings of interests for financial reporting purposes, and as
a result, the financial position and results of operations are presented as if
the combining companies had been consolidated for all periods presented. The
financial data include in the opinion of management, all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the data for
the periods presented. The unaudited selected pro forma financial data should be
read in conjunction with the other financial information included or
incorporated by reference in this Prospectus. Such financial data are not
necessarily indicative of the results that would have occurred if the
acquisitions had been in effect during the periods presented or which may be
attained in the future.
<TABLE>
<CAPTION>
Nine Months
Year Ended December 31, Ended September 30,
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
Pro Forma Statement of Operations
Data:
<S> <C> <C> <C> <C> <C>
Net revenues $74,760 $87,403 $99,621 $73,023 $80,684
Operating income 7,168 6,396 9,917 8,201 1,695
Net income 4,196(1) 3,180(2) 6,237(3) 5,072(4) 169(5)
Net income per share $0.53(1) $0.35(2) $0.66(3) $0.54(4) $0.02(5)
Shares used in per share calculation 7,926 9,042 9,382 9,321 9,643
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<PAGE>
Pro Forma Balance Sheet Data:
As of December 31, As of September 30,
1995 1996 1997
------ ------ -------
Working capital $4,163 $9,042 $12,944
Total assets 53,096 63,052 57,463
Total stockholders' equity 21,232 29,099 29,191
</TABLE>
(1) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $1,928.
(2) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $1,051 and a write-off principally
of certain software assets capitalized more than two years ago amounting to
$2,466.
(3) Includes a pre-tax write-off of acquired in-process technology and other
acquisition-related charges amounting to $3,636.
(4) Includes a pre-tax write-off of acquisition-related charges amounting to
$980.
(5) Includes pre-tax charges of $2,413 relating to certain asset write-downs
and acquisition-related costs of $5,985.
RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully by potential purchasers in
evaluating a sale of the Common Stock offered hereby.
Fluctuations in Quarterly Operating Results. The Company's quarterly
operating results can be subject to fluctuation due to several factors,
including the number and timing of product updates and new product
introductions, delays in product development and introduction, purchasing
schedules of its customers, changes in foreign currency exchange rates, product
and market development expenditures, the timing of product shipments, changes in
product mix, timing, costs and effects of acquisitions and general economic
conditions. Because the Company's expense levels are to a large extent based on
its forecasts of future revenues, operating results may be adversely affected if
such revenues fall below expectations. Accordingly, the Company believes that
quarter-to-quarter comparisons of its results of operations may not be
meaningful and should not be relied upon as an indication of future performance.
The Company has historically operated with very little backlog because its
products are generally shipped as orders are received. As a result, revenues in
any quarter are dependent on orders shipped and licenses renewed in that
quarter. The Company has experienced a seasonal pattern in its operating results
with the fourth quarter typically having the highest operating income. For
example, excluding acquisition and other non-recurring charges, the percentage
of the Company's operating income realized in the fourth quarter was 33% in
1994, 34% in 1995 and 32% in 1996. In addition, the timing and amount of the
Company's revenues are subject to a number of factors that make estimation of
operating results prior to the end of a quarter uncertain. A significant portion
of the Company's operating expenses are relatively fixed, and planned
expenditures are based primarily on revenue forecasts. More specifically, in the
fourth quarter, the variable profit margins on modest increases in sales volume
at the end of the quarter are significant. Should the Company fail to achieve
such fourth quarter revenue increases, net income for the fourth quarter and the
full year could be materially affected. Generally, if revenues do not meet the
Company's expectations in any given quarter, operating results will be adversely
affected. Although the Company had been profitable in each of the seven quarters
up to and including the quarter ending June 30, 1994, the Company experienced a
net loss of $137,000 in the third quarter of 1994 due to a one-time write-off of
$1,928,000 for acquired and in-process technology and other acquisition-related
charges
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<PAGE>
recorded in connection with the Company's acquisition of SYSTAT, Inc.
("SYSTAT"). The Company was profitable in the seven quarters from December 31,
1994 through June 30, 1997, but had a net loss of $3,401,000 in the third
quarter of 1997 due primarily to one-time acquisition charges of $5,985,000 and
a charge from the revaluation of certain assets of $2,413,000. There can be no
assurance that profitability on a quarterly or annual basis can be achieved or
sustained in the future.
Dependence on a Single Product Category; Declining Sales of Certain
Products. The Company derives the major part of its product revenues from
licenses of statistical software. Accordingly, any decline in revenues from
licenses of the Company's statistical software, or reduction in demand for
statistical software generally, could have a material adverse effect on the
Company.
In recent years, SPSS, excluding the effects of the Quantime and
In2itive acquisitions, has experienced a significant shift in the sources of its
revenues. Historically, the Company derived a large portion of its revenues from
licenses of its mainframe and minicomputer ("Large Systems") products. As a
result of the general shift by computer users from Large Systems to desktop
computers, the Company experienced a decline in revenues from Large Systems
products in the last several years, although in 1996 sales of Large Systems
products stabilized. Revenues from Large Systems licenses declined from
approximately $15.6 million in 1991 to $10.7 million in 1996, while sales of
desktop products increased from $14.7 million in 1991 to $66.2 million in 1996.
Revenues from Large Systems licenses increased slightly from 1995 to 1996, by
$45,000. Management is unable to predict whether the decline in Large Systems
licenses will continue or at what rate such licenses will decline. Revenues from
the Company's products for desktop computers ("Desktop products") now account
for nearly three-quarters of the Company's revenues and this percentage may
continue to increase.
Risk Relating to Business Integration in Europe and Other Acquisitions.
In recent years, SPSS has made a significant number of acquisitions, including
the acquisition of businesses based outside of the United States. See "Recent
Developments." While SPSS has substantial international operations, it faces
challenges and business integration issues with its September, 1997 acquisition
of Quantime Limited, a corporation organized under the laws of the United
Kingdom ("Quantime"). Although persons whom the Company believes are qualified
and trained will continue to work with Quantime after its acquisition by SPSS,
there can be no assurance that Quantime will be able to retain these employees
or hire suitable replacements in the event they should leave the employ of SPSS.
If the Company loses key personnel from Quantime or is unable to integrate
Quantime's business into its own effectively, the Company may experience a
material adverse impact on its financial condition. While SPSS believes that it
has been successful in integrating the acquisitions it has made in the past,
there can be no assurance that the recent acquisitions of Quantime or In2itive
or future acquisitions will be successfully integrated into SPSS.
Rapid Technological Change. The computer software industry is
characterized by rapid technological advances, changes in customer requirements,
frequent product enhancements and new product introductions. The Company's
future success will depend upon its ability to enhance its existing products and
introduce new products that keep pace with technological developments, respond
to evolving customer requirements and achieve market acceptance. In particular,
the Company believes it must continue to respond quickly to users' needs for
greater functionality, improved usability and support for new hardware and
operating systems. Any failure by the Company to respond adequately to
technological developments and customer requirements, or any significant delays
in product development or introduction, could result in loss of revenues. In the
past, the Company has, on occasion, experienced delays in the introduction of
new products and product enhancements, primarily due to difficulties with
particular operating environments and problems with software provided by third
parties. The extent of these delays has varied depending upon the size and scope
of the project and the nature of the problems encountered. Such delays have most
often resulted from "bugs" encountered in working with new and/or beta-stage
versions of operating systems and other third party software, and bugs or
unexpected difficulties in existing third party software which complicate
integration with the Company's software. From time to time, the Company has
discovered bugs in its products which are resolved through maintenance releases
or through periodic updates depending upon the seriousness of the defect. There
can be no assurance that the Company will be successful in developing and
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<PAGE>
marketing new products or product enhancements on a timely basis or that the
Company will not experience significant delays or defects in its products in the
future, which could have a material adverse effect on the Company. In addition,
there can be no assurance that new products or product enhancements developed by
the Company will achieve market acceptance or that developments by others will
not render the Company's products or technologies obsolete or noncompetitive.
International Operations. The Company's revenues from operations
outside of North America accounted for approximately 49%, 52% and 53% of the
Company's net revenues in 1994, 1995 and 1996, respectively. The Company expects
that revenues from international operations will continue to represent a large
percentage of its net revenues and that this percentage may increase,
particularly as the Company further "localizes" the SPSS product line by
translating its products into additional languages and expands its operations
through acquisitions of companies outside the United States. International
revenues are subject to a number of risks, including greater difficulties in
accounts receivable collection, longer payment cycles, exposure to currency
fluctuations, political and economic instability and the burdens of complying
with a wide variety of foreign laws and regulatory requirements. The Company
also believes that it is exposed to greater levels of software piracy in
international markets because of the weaker protection afforded to intellectual
property in some foreign jurisdictions. As the Company expands its international
operations, the risks described above could increase and, in any event, could
have a material adverse effect on the Company.
Potential Volatility of Stock Price. There has been significant
volatility in the market prices of securities of technology companies, including
SPSS, and, in some instances, such volatility has been unrelated to the
operating performance of such companies. Market fluctuations may adversely
affect the price of the Common Stock. The Company also believes factors such as
announcements of new products by the Company or its competitors, quarterly
variations in financial results, recommendations and reports of analysts,
acquisitions and factors beyond the Company's control could cause the market
price of the Common Stock to fluctuate substantially.
Reliance on Relationships with Third Parties. The Company licenses
certain software from third parties. Some of this licensed software is embedded
in the Company's products, and some is offered as add-on products. If such
licenses are discontinued, or become invalid or unenforceable, there can be no
assurance that the Company will be able to develop substitutes for this software
independently or to obtain alternative sources in a timely manner. Any delays in
obtaining or developing substitutes for licensed software could have a material
adverse effect on the Company.
In February 1993, the Company entered into an exclusive, worldwide
agreement (the "Prentice Hall Agreement") with Prentice Hall, Inc. ("Prentice
Hall") under which Prentice Hall publishes and distributes the student version
of the Company's software and all of the Company's publications. As a result,
the Company is dependent on Prentice Hall for the development and support of the
markets for student software and its publications. The failure of Prentice Hall
to perform its obligations under the Prentice Hall Agreement adequately could
have a material adverse effect on the Company.
In January 1997, the Company entered into a Banta Global Turnkey
Software Distribution Agreement (the "Banta Agreement"), under which Banta
Global Turnkey ("Banta") manufactures, packages, and distributes the Company's
software products to the Company's domestic and international customers and
certain international subsidiaries. The Banta Agreement has a three-year term
and automatically renews thereafter for successive periods of one year. Either
party may terminate the Banta Agreement for cause by written notice if the other
materially breaches its obligations. Such a termination notice for cause must
specifically identify the breach (or breaches) upon which it is based and will
be effective 180 days after the notice is received by the other party, unless
the breach(es) is (are) corrected during the 180 days. Either party may also
terminate the Banta Agreement on 180 days' notice for any other reason. If Banta
terminates the Banta Agreement other than for cause, it is required to assist
the Company in finding a new vendor. If Banta fails to perform adequately any of
its obligations under the Banta Agreement, the Company's operating results could
be materially adversely affected.
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<PAGE>
Changes in Public Expenditures and Overall Economic Activity Levels. A
significant portion of the Company's revenues comes from licenses of its
products directly to foreign and domestic government entities. In addition,
significant amounts of the Company's revenues come from licenses to academic
institutions, healthcare organizations and private businesses which contract
with or are funded by government entities. Government appropriations processes
are often slow, unpredictable and subject to factors outside the Company's
control. In addition, proposals are currently being made in certain countries to
reduce government spending. Reductions in government expenditures and
termination or renegotiation of government-funded programs or contracts could
have a material adverse effect on the Company. In addition, declines in overall
levels of economic activity could also have a material adverse impact on the
Company.
Competition. The market for the statistical software is both highly
competitive and fragmented. The Company primarily competes with one general
statistical software provider which is larger and has greater resources than the
Company, as well as with numerous other companies offering statistical
applications software, many of which offer products focused on specific
statistical applications. The Company considers its primary worldwide competitor
to be the larger and better-financed SAS Institute ("SAS"), although the Company
believes that SAS's revenues are derived principally from products that are used
for purposes other than statistics and operate on large systems platforms.
StatSoft Inc., developers of the Statistica product ("Statistica"), Manugistics
Group, Inc., distributors of the Statgraphics Plus product ("Statgraphics"), and
Minitab, Inc. ("Minitab") are also competitors, although their annual revenues
from statistical products are believed to be considerably less than the revenues
of SPSS.
In the future, SPSS may face competition from new entrants into the
statistical software market. The Company could also experience competition from
companies in other sectors of the broader market for data management, analysis
and presentation software, such as providers of spreadsheets, database
management systems, report writers and executive information systems. These
companies have added, or in the future may add, statistical analysis
capabilities to their products. Many of these companies have significant name
recognition, as well as substantially greater capital resources, marketing
experience and research and development capabilities than the Company. There can
be no assurance that the Company will have sufficient resources to make the
necessary investment in research and development and sales and marketing, or
that the Company will otherwise be able to make the technological advances
necessary to maintain or enhance its competitive position. The Company's future
success will also depend significantly upon its ability to continue to sell its
Desktop products, to attract new customers looking for more sophisticated or
powerful software and to introduce additional add-on products to existing
customers. There can be no assurance that the Company will be able to compete
successfully in the future.
Dependence on Key Personnel. The Company is dependent on the efforts of
certain executives and key employees, including its President and Chief
Executive Officer, Jack Noonan. The Company's continued success will depend in
part on its ability to attract and retain highly qualified technical,
managerial, sales, marketing and other personnel. Competition for such personnel
is intense. There can be no assurance that the Company will be able to continue
to attract or retain such highly qualified personnel. No life insurance policies
are maintained on the Company's key personnel.
Intellectual Property; Proprietary Rights. The statistical algorithms
incorporated in the Company's software are not proprietary. The Company believes
that the proprietary technology constituting a portion of the Company's software
determines the speed and quality of displaying the results of computations, the
connectivity of the Company's products with third party software and the ease of
use of its products. The Company's success will depend, in part, on its ability
to protect the proprietary aspects of its products. The Company attempts to
protect its proprietary software with trade secret laws and internal
nondisclosure safeguards, as well as copyright and trademark laws and
contractual restrictions on copying, disclosure and transferability that are
incorporated into its software license agreements. The Company licenses its
software only in the form of executable code, with contractual restrictions on
copying, disclosures and transferability. Except for licenses of its products to
users of Large System products and annual licenses of its Desktop products, the
Company licenses its products to end-users
- 9 -
<PAGE>
by use of a "shrink-wrap" license that is not signed by licensees, as is
customary in the industry. It is uncertain whether such license agreements are
legally enforceable. The source code for all of the Company's products is
protected as a trade secret and as unpublished copyrighted work. In addition,
the Company has entered into confidentiality and nondisclosure agreements with
its key employees. Despite these restrictions, it may be possible for
competitors or users to copy aspects of the Company's products or to obtain
information which the Company regards as a trade secret. The Company has no
patents, and judicial enforcement of copyright laws may be uncertain,
particularly outside of North America. Preventing unauthorized use of computer
software is difficult, and software piracy is expected to be a persistent
problem for the packaged software industry. These problems may be particularly
acute in international markets. In addition, the laws of certain countries in
which the Company's products are or may be licensed do not protect the Company's
products and intellectual property rights to the same extent as the laws of the
United States. Despite the precautions taken by the Company, it may be possible
for unauthorized third parties to reverse engineer or copy the Company's
products or obtain and use information that the Company regards as proprietary.
There can be no assurance that the steps taken by the Company to protect its
proprietary rights will be adequate to prevent misappropriation of its
technology.
Although the Company's products have never been the subject of an
infringement claim, there can be no assurance that third parties will not assert
infringement claims against the Company in the future or that any such assertion
will not result in costly litigation or require the Company to obtain a license
to use the intellectual property of third parties. There can be no assurance
that such licenses will be available on reasonable terms, or at all. There can
also be no assurance that the Company's competitors will not independently
develop technologies that are substantially equivalent or superior to the
Company's technologies.
Control by Existing Stockholders; Antitakeover Effects. As of November
24, 1997, the Company's executive officers and directors owned beneficially
approximately 13% of the outstanding shares of Common Stock. The Norman H. Nie
Revocable Trust Dated March 15, 1991 (the "Nie Trust") and affiliates of the Nie
Trust are entitled to nominate a director for inclusion in the management slate
for election to the Board if the Nie Trust owns no less than 12.5% of the
outstanding shares of Common Stock. As of November 24, 1997, the Nie Trust and
affiliates of the Nie Trust beneficially owned approximately 12.3% of the
outstanding shares of Common Stock. The Company's Certificate of Incorporation
and Bylaws contain a number of provisions, including provisions requiring an 80%
super majority stockholder approval of certain actions and provisions for a
classified Board of Directors, which would make the acquisition of the Company,
by means of an unsolicited tender offer, a proxy contest or otherwise, more
difficult or impossible.
Shares Eligible for Future Sale. The Company is filing the Registration
Statement to permit transactions with respect to the shares of Common Stock
issued in connection with the Quantime and In2itive transactions. These shares
of Common Stock are currently deemed "restricted securities," as defined in Rule
144 under the Securities Act, and may not be resold in the absence of
registration under the Securities Act or pursuant to an exemption from such
registration, including exemptions provided by Rule 144 under the Securities
Act.
In addition to the shares of Common Stock which are outstanding, as of
November 24, 1997, there were vested options outstanding held by management to
purchase approximately an additional 686,971 shares of Common Stock, with an
average exercise price of $8.19 per share, and unvested options to purchase
approximately an additional 169,972 shares of Common Stock. The Company has also
established a stock purchase plan available to employees of the Company, which
permits employees to acquire shares of Common Stock at the end of each quarter
at 85% of the market price of the Common Stock as of the day after the end of
the quarter.
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of Common Stock for future sales, will have on the
market price prevailing from time to time. Sales of substantial amounts of
Common Stock by the Company or by shareholders who hold "restricted securities,"
or the perception that such sales may occur, could adversely affect prevailing
market prices for the Common Stock.
- 10 -
<PAGE>
Accumulated Deficit. The Company had an accumulated deficit of
$11,597,000 as of December 31, 1996.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each Selling Stockholder as of November 24, 1997, the
number of shares of Common Stock that may be offered for the Selling
Stockholder's account and the number of shares of Common Stock and based on the
number of shares of Common Stock beneficially owned as of November 24, 1997, the
percentage of the shares of Common Stock to be beneficially owned by such
Selling Stockholder if they elect to sell all of their Shares of Common Stock
that are available for sale.
<TABLE>
<CAPTION>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael Oestreicher 441,635 441,635 0 *
TR UA DTD 6/30/97
Edward Sherman Ross Trust
312 Walnut Street, Suite 1400
Cincinnati, OH 45202-4029
Joya Charitable Foundation 88,418 88,418 0 *
312 Walnut Street, Suite 1400
Cincinnati, OH 45202-4029
Min Charitable Trust 16,007 16,007 0 *
c/o Richard Cassell
Brown & Wood, Princes Court
7 Princes Street
London EC2R 8AQ UK
M Ross 1,904 1,904 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
J Powell 1,904 1,904 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 11 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Norman Grunbaum 115,744 115,744 0 *
TR UA DTD 6/30/97
Norman Grunbaum Discretionary Settlement
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Richard Kottler
TR UA DTD 6/30/97
Richard Kottler Discretionary Settlement 119,522 119,522 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
International Services SA 27,375 27,375 0 *
7-11 Britannia Place
Bath Street
St. Helier, Jersey JE4 8US
Channel Islands
Louis Davidson 2,585 2,585 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
J Marinelli 20,261 20,261 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Stephanie Gwilliam 13,117 13,117 0 *
1 Redroofs Close, The Avenue
Beckenham, Kent BR3 2YR
Tony Legg 10,297 10,297 10,297 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 12 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Mark Katz 9,530 9,530 9,530 0 *
26 Hoop Lane
London NW11 8BU UK
Eva Huzan 4,420 4,420 4,420 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Madeleine Ashbery 3,047 3,047 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Valerie Griffin 2,455 2,455 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
Pete Trotman 2,331 2,331 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Joni Orgel 2,087 2,087 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Adrian Dewey 1,675 1,675 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Pete Dacosta 761 761 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
- 13 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Nick Brown 761 761 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jonathan Chody 761 761 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Gail Haslam 609 609 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Annie McGlone 608 608 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Alan Renny 536 536 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Earl Wardally 456 456 0 *
c/o Quantime Ltd.
11 East 26th Street, 16th Floor
New York, NY 10010
Martin Klein 432 432 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 14 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Sharon Jordan 334 334 0 *
c/o Quantime Corp.
100 Merchant Street, Suite 125
Cincinnati, OH 45246
Heather Dyer 254 254 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Sue Wooderson 229 229 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jonathan Rabson 229 229 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jorge Almonacid 197 197 0 *
c/o Quantime SA de CV
Passeo de la Reforma
90-4 Pisco, Suite 405
Colonia Juarez Mexico
Roger Phillips 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Louise Weale 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
- 15 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
John Taggart 152 152 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Andi Peretz 152 152 0 *
540 8th Street, Brooklyn
New York, NY 11215
Gwen Smith 75 75 0 *
c/o Quantime Corp.
11 East 26th Street, 16th Fl
New York, NY 10010
Wes Frost 30 30 0 *
c/o Quantime Corp.
100 Merchant Street
Suite 125
Cincinnati, OH 45246
Sue Jordan 30 30 0 *
c/o Quantime Ltd.
Maygrove House
Maygrove Road
London NW6 2EG UK
Jens Nielsen 8,838 8,838 0 *
Ingas Vag 27 PL. 494
28691 Orkelljunga
Sweden
Henrik Rosendahl 8,838 8,838 0 *
Dyrehavevej 27, I
2930 Klampenborg
Denmark
Ole Stangegaard 1,087 1,087 0 *
Tvaerfej 46
2830 Vitum
Denmark
- 16 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Lars Thinggaard 1,087 1,087 0 *
Drosselvej 53 K
2000 Frederiksberg
Denmark
Peter Tottrup 3,020 3,020 0 *
Langelands Plads5, 4th.
2000 Frederiksberg
Denmark
Edward O'Hara 16,827 16,827 0 *
Nattergalevej 16
2970 Horsholm
Denmark
Steen Hansen 314 314 0 *
Snogegardsvej 120
2860 Soborg
Denmark
Magnus Egholm 97 97 0 *
GI. Jernbanevej 26, 1th.
2500 Valby
Denmark
Mikkel Jorgensen 869 869 0 *
Baunehojvej 46, st.tv.
2800 Lyngby
Denmark
Michael Elbaek Bertelsen 194 194 0 *
Lundtofteparken 36, 2th.
2800 Lyngby
Denmark
Bjame Jensen 543 543 0 *
Lilsviervej 81B, 1tv.
2800 Lyngby
Denmark
Thomas Leistiko 431 431 0 *
Arhusgade 10, 1tv.
2100 Kobenhavn O
Denmark
Dansk Erhvervsinvestering 12,944 12,944 0 *
Bredgade 73
1260 Kobenhavn K
Denmark
- 17 -
<PAGE>
Maximum Shares of Common
Number Stock To Be
Shares of of Shares Beneficially Owned
Common Stock Available Assuming Sale of All
Beneficially To Be Sold Shares Available For
Name and Address of Owned As of Pursuant Sale Hereunder
Selling Stockholder November 26, 1997 Hereto Number Percent
- ---------------------------------------------------------------------------------------------------------------
Bjorn Haugland 27,767 27,767 0 *
Camilla Collettesvei 8
9258 Oslo
Norway
2M Invest 47,541 47,541 0 *
Frederiksgade 9
1265 Kobenhavn K
Denmark
Dorte Siggaard Andersen 1,087 1,087 0 *
Malmmosevej 3
2840 Holte
MSP Finans 2ApS 5,438 5,438 0 *
Parkvaenget 2829
2920 Charlottenlund
Hans Chr. Iversen 3,805 3,805 0 *
Rungstedvej 97
2960 Rungsted
</TABLE>
* The percentage of shares beneficially owned does not exceed 1% of the
class.
The Company has agreed to register offers, sales and other distributions
of the shares of Common Stock of the Selling Stockholders and Donee Stockholders
offered hereby under the Securities Act. In this connection, the Selling
Stockholders and Donee Stockholders are required to pay the underwriting
discounts and commissions and transfer taxes, if any, associated with the sale
of their shares of Common Stock, and the Company will pay substantially all of
the expenses directly associated with the registration of such shares of Common
Stock hereunder.
USE OF PROCEEDS
The Company will not receive any proceeds from the registration or
sale of the shares of Common Stock offered hereby.
DIVIDEND POLICY AND RESTRICTIONS
The Company has never declared any cash dividends or distributions on
its capital stock and does not anticipate paying cash dividends in the
foreseeable future. The Company currently intends to retain its future earnings
to fund ongoing operations and future capital requirements of its business.
PLAN OF DISTRIBUTION
The Common Stock may be offered by the Selling Stockholders or Donee
Stockholders from time to time in transactions on the Nasdaq National Market, in
negotiated transactions, or a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders or Donee Stockholders may effect such transactions by the
sale of the Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders, Donee Stockholders and/or the purchasers of the
Common Stock for whom such broker-dealers may act as agent or to whom they may
sell as principal, or both (which compensation to a particular broker-dealer
might be in excess of customary commissions). The Selling Stockholders, Donee
Stockholders and any
- 18 -
<PAGE>
broker-dealer who acts in connection with the sale of Common Stock hereunder may
be deemed to be "underwriters" as that term is defined in the Securities Act,
and any commission received by them and profit on any resale of the Common Stock
as principal might be deemed to be underwriting discounts and commissions under
the Securities Act.
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of Common Stock for future sales, will have on the
market price prevailing from time to time. See "RISK FACTORS -- Shares Eligible
for Future Sale" elsewhere in this Prospectus.
The Company is filing a registration statement to permit transactions
with respect to all of the shares of SPSS Common Stock acquired by former
shareholders of Quantime and In2itive in connection with the acquisitions of
Quantime and In2itive. These shares are currently "restricted securities," as
defined in Rule 144 under the Securities Act, and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including exemptions provided by Rule 144 under the
Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock was passed upon for the
Company by its general counsel, Ross & Hardies, Chicago, Illinois.
EXPERTS
The Consolidated Financial Statements and Schedule of the Company as
of December 31, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, as indicated in their report with
respect thereto, incorporated by reference herein, and are incorporated by
reference herein upon the authority of said firm as experts in accounting and
auditing.
With respect to SPSS Inc.'s unaudited interim financial information
for the periods ended March 31, 1996 and 1997, June 30, 1996 and 1997, and
September 30, 1996 and 1997, incorporated by reference herein, the independent
certified public accountants have reported that they applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate reports included in the Company's quarterly reports on
Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and September
30, 1997, state that they did not audit and they do not express an opinion on
such interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because such reports are
not a "report" or a "part" of the registration statement prepared or certified
by the accountants within the meaning of Sections 7 and 11 of the Securities Act
of 1933.
- 19 -
<PAGE>
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION 1,031,951 Shares
OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS
IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN SPSS INC.
AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY COMMON STOCK
CIRCUMSTANCES CREATE AN IMPLICATION ($.01 PAR VALUE)
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH _________________
OFFER OR SOLICITATION IS NOT AUTHORIZED Prospectus
OR IN WHICH THE PERSON MAKING SUCH OFFER _________________
OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR
TABLE OF CONTENTS SOLICITATION IS NOT Dated November ___, 1997
QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
TABLE OF CONTENTS
Page
Available Information........................................ 2
Incorporation of Certain Documents by Reference.............. 2
The Company.................................................. 4
Risk Factors................................................. 6
Selling Stockholders........................................ 11
Plan of Distribution........................................ 17
Use of Proceeds..............................................16
Dividend Policy and Restrictions............................ 17
Legal Matters............................................... 17
Experts..................................................... 17
- --------------------------------------------------------------------------------
- 20 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth various estimated fees and estimated
expenses in connection with the sale and distribution of the securities being
registered, all of which are being borne by the registrant.
SEC registration fee.................................$ 7,094.66
Printing expenses....................................$ 1,000.00
-------------
Legal fees and expenses..............................$ 20,000.00
Accounting fees and expenses.........................$ 30,000.00
Miscellaneous........................................$ 1,905.34
-------------
Total......................................$ 60,000.00
============
Item 15. Indemnification of Directors and Officers
Delaware General Corporation Law. The Company has statutory authority
to indemnify the officers and directors. The applicable provisions of the
General Corporation Law of the State of Delaware (the "GCL") state that, to the
extent such person is successful on the merits or otherwise, a corporation may
indemnify any person who was or is a party or who is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that he is or was
a director, officer, employee or agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
("such Person"), against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement, actually and reasonably incurred by such Person,
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In any threatened pending or completed action by or in the right
of the corporation, a corporation also may indemnify any such Person for costs
actually and reasonably incurred by him in connection with that action's defense
or settlement, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation; however, no
indemnification shall be made with respect to any claim, issue or matter as to
which such Person shall have been adjudged to be liable to the corporation,
unless and only to the extent that a court shall determine that such indemnity
is proper.
Under the applicable provisions of the GCL, any indemnification shall
be made by the corporation only as authorized in the specific case upon a
determination that the indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct. Such determination shall be made:
(1) By the Board of Directors by a majority vote of a quorum
consisting of directors who are not parties to such action, suit or
proceeding; or
(2) If such a quorum is not obtainable or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion; or
(3) By the affirmative vote of a majority of the shares
entitled to vote thereon.
- 21 -
<PAGE>
The Company's Certificate of Incorporation provides for
indemnification to the full extent permitted by the laws of the State of
Delaware against and with respect to threatened, pending or completed actions,
suits or proceedings arising from or alleged to arise from, a party's actions or
omissions as a director, officer, employee or agent of the Company or of any
subsidiary of the Company or of any other corporation, partnership, joint
venture, trust or other enterprise which he has served in such capacity at the
request of the Company if such acts or omissions occurred or were or are alleged
to have occurred, while said party was a director or officer of the Company.
- 22 -
<PAGE>
Item 16. Exhibits
Incorporation
by
Exhibit Reference
Number Description (if applicable)
2.1 Stock Purchase Agreements - Quantime *
2.2 Stock Purchase Agreement - In2itive
5.1 Opinion of Ross & Hardies regarding legality of
shares of Common Stock
15.1 Letter Re: Unaudited Interim Financial Information
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ross & Hardies (contained in opinion
described in 5.1)
24.1 Power of Attorney * *
* Two Stock Purchase Agreements, each dated September 30, 1997, between SPSS
and certain shareholders of Quantime are included as an exhibit to the Company's
report on Form 8-K filed with the Commission on October 15, 1997. The remaining
Stock Purchase Agreement is being filed herewith.
* * Included in signature pages.
(b) The Company did not file any reports on form 8-K during fiscal
year 1995 or for the first two quarters of fiscal year 1996. The Company filed
reports on Form 8-K with the Commission on October 11, 1996 (acquisition of
Clear Software), and on December 4, 1996 (acquisition of Jandel Corporation),
and on October 15, 1997 (acquisition of Quantime Limited).
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
- 23 -
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
- 24 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago,
State of Illinois, on November 26, 1997.
SPSS INC.
By: /s/ Jack Noonan
Jack Noonan
President and Chief Executive Officer
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<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Jack Noonan and Edward Hamburg, and each of them, the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in furtherance of the
foregoing, as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on November 26, 1997.
Signature Title(s)
/s/ Norman H. Nie
Norman H. Nie Chairman of the Board of Directors
/s/ Jack Noonan
Jack Noonan President, Chief Executive Officer and Director
/s/ Edward Hamburg
Edward Hamburg Executive Vice President, Corporate Operations,
Chief Financial Officer and Secretary
/s/ Robert Brinkmann
Robert Brinkmann Controller and Assistant Secretary
(Chief Accounting Officer)
/s/ Bernard Goldstein
Bernard Goldstein Director
/s/ Frederic W. Harman
Frederic W. Harman Director
/s/ Merritt Lutz
Merritt Lutz Director
/s/ Michael Blair
Michael Blair Director
- 26 -
<PAGE>
SPSS INC.
EXHIBIT INDEX
Location of Document
Exhibit in Sequential
No. Description of Document Numbering System
2.1 Third Stock Purchase Agreement - Quantime
2.2 Stock Purchase Agreement - In2itive
5.1 Opinion of Ross & Hardies regarding legality of
shares of Common Stock (includes consent of Ross
& Hardies)
15.1 Letter re: Unaudited Interim Financial Statements
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney *
* Included in signature pages.
- 27 -
STOCK PURCHASE AGREEMENT
By and Among
SPSS INC.
and
THE SHAREHOLDERS OF QUANTIME LIMITED
LISTED ON THE SIGNATURE PAGES HEREOF
Dated as of November 21, 1997
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 21, 1997, (the
"Agreement"), by and among SPSS INC., a Delaware corporation ("SPSS") and the
shareholders of Quantime Limited, a corporation incorporated under the laws of
England with Registered Number 1400578 ("Quantime") listed on the signature
pages of this Agreement (hereinafter collectively referred to as the "Quantime
Shareholders").
W I T N E S S E T H:
WHEREAS, Quantime is engaged in the business of developing and
distributing market research software encapsulating strong data collection,
tabulation, on-screen analysis and EIS capabilities;
WHEREAS, the respective Boards of Directors of each of Quantime, and
SPSS have determined that it is advisable and for the benefit of their
corporations and their respective shareholders that Quantime be acquired by SPSS
by means of the acquisition from the Quantime Shareholders of the outstanding
capital shares of Quantime, comprised of Class "A" 1 pence ordinary shares,
Class "B" 1 pence ordinary shares and Class "C" US$0.01 ordinary shares
(collectively, the "Shares") including those represented by bearer warrants (the
"Warrants") held by the Quantime Shareholders, in exchange for shares of common
stock $.01 par value per share of SPSS (the "Common Stock"), pursuant to the
terms and conditions set forth herein (the "Acquisition");
WHEREAS, on September 30, 1997, SPSS acquired 96.8384% of the issued
and outstanding Shares from certain UK-connected and non-UK connected
shareholders of Quantime (collectively, the "Majority Shareholders"), pursuant
to those certain Stock Purchase Agreements dated as of September 30, 1997 (such
Stock Purchase Agreements are hereinafter collectively referred to as the "Prior
Agreements") between SPSS, the Majority Shareholders and Edward Ross, Richard
Kottler, Norman Grunbaum and Louis Davidson.
WHEREAS, the Quantime Shareholders own of record and beneficially
3.1616% of the issued and outstanding Shares;
WHEREAS, for United States federal income tax purposes, it is intended
that this transaction qualify as a reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code"), and that for United Kingdom taxation purposes, the transaction likewise
qualify as a reorganization (or the United Kingdom equivalent thereof) under the
provisions of applicable tax laws of the United Kingdom; and
WHEREAS, for United States accounting purposes, it is intended that
this transaction be accounted for as a "pooling of interests".
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and
<PAGE>
sufficiency of which is hereby acknowledged, and in reliance upon the
representations and warranties contained herein, the parties hereto agree as
follows:
ARTICLE I
TERMS OF PURCHASE AND SALE
1.1 Purchase and Sale of the Shares. Subject to the terms and
conditions contained in this Agreement, on the Closing Date (as hereinafter
defined), the Quantime Shareholders shall sell, assign, transfer and deliver the
Shares owned by them to SPSS, and SPSS shall purchase the Shares owned by the
Quantime Shareholders from the Quantime Shareholders, for an aggregate purchase
price consisting of the items and amounts set forth in Section 1.3 hereof (the
"Purchase Price") payable pursuant to the terms provided in Section 1.3 hereof.
The Quantime Shareholders hereby represent, warrant and covenant that (a) the
Quantime Shareholders own and have good title to the Shares, free and clear of
any lien, pledge, claim, encumbrance, restriction or right of any third party of
any kind; (b) at the Closing, SPSS will acquire good title to the Shares owned
by the Quantime Shareholders free and clear as aforesaid, including without
limitation any of the foregoing set forth in the Memorandum of Association of
Quantime; and (c) the Shares owned by the Quantime Shareholders represent the
only equity interest of the Quantime Shareholders in Quantime. Each of the
Quantime Shareholders waives any rights of pre-emption and rights of first
refusal in relation to sales or transfers of the Shares owned by the Quantime
Shareholders, whether under the Articles of Association of Quantime or
otherwise.
1.2 Closing. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated hereby (the "Closing") shall take place
at the offices of Berwin Leighton in London forthwith on this Agreement being
executed.
1.3 Payment of Purchase Price. Upon satisfaction of all matters set
forth in Article VIII hereof (the "Closing Date"), SPSS shall deliver to the
Quantime Shareholders the Purchase Price consisting of 28,175 shares of SPSS
Common Stock (the "Total Shares" or "Acquisition Stock") to be allocated between
the Quantime Shareholders as set forth in Schedule 1.3 hereof. Only whole shares
of SPSS Common Stock will be issued in connection with the Acquisition. In lieu
of fractional shares, each Quantime Shareholder otherwise entitled to a
fractional share of SPSS Common Stock will be paid in cash an amount equal to
the amount of such fraction multiplied by the closing price of SPSS Common Stock
on September 30, 1997. No such shareholder will be entitled to dividends, voting
rights or other rights in respect of any such fractional share.
1.4 Tax and Accounting. The parties hereto shall each use all
reasonable efforts to cause the transactions contemplated hereunder to be
treated as (i) a reorganization within the meaning of Section 368(a)(1)(B) of
the Code, and (ii) to qualify for accounting treatment as a pooling of
interests.
2
<PAGE>
ARTICLE II
SECURITIES MATTERS
2.1 Registration of SPSS Common Stock.
(a) SPSS shall prepare and file with the United States
Securities and Exchange Commission ("SEC") as soon as practicable, subject to
review by the Quantime Shareholders, (but in no event later than 90 days after
the Closing) a registration statement on Form S-3 and/or Form S-4, as
appropriate (together with all amendments and supplements to any such
registration statement, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement, the "Registration Statement"), under the Securities Act
of 1933, and the rules and regulations promulgated thereunder (the "1933 Act" or
the "Act"), for the registration (the "Registration") of the secondary offering
of the SPSS Common Stock for the account of the Quantime Shareholders. SPSS
expects to have published audited financial results, covering at least thirty
(30) days of the combined operations of SPSS and Quantime following the
Acquisition, not later than March 31, 1998. SPSS shall use all reasonable
efforts to have the Registration declared effective by the SEC promptly after
filing. To the extent that shares of SPSS Common Stock are not acquired by a
Quantime Shareholder pursuant to an effective registration statement on Form
S-4, SPSS shall use all reasonable efforts to register such SPSS Common Stock
for sale on a delayed or continuous basis under Rule 415 of the 1933 Act and,
provided that Form S-3 shall be available to SPSS for the Registration, to keep
such Registration Statement continuously effective, current and available for
use by the Quantime Shareholders for a period of twenty-four (24) months
following the date of effectiveness, or such shorter period that will terminate
when all of the shares of SPSS Common Stock have been sold by the Quantime
Shareholders (the "Trading Period"). While any Form S-3 Registration Statement
remains in effect, SPSS may at any time deliver to the Quantime Shareholders
written notice to the effect that sales may not be effected under the
Registration Statement for a period of time (the "Blackout Period") because of
the existence of material facts not disclosed or incorporated by reference in
such Registration Statement and in the then-current prospectus included therein;
upon receipt of any such notice, the Quantime Shareholders shall refrain from
selling any shares of SPSS Common Stock under such Registration Statement until
they have received notice from SPSS to the effect that such sales may then be
effected. In no event shall the Blackout Period be greater than any similar
period of time during which SPSS restricts any of its employees from effecting
sales in SPSS Common Stock because of the existence of material facts not
disclosed or incorporated by reference in any then-effective registration
statement and in the then-current prospectus included therein or otherwise not
publicly disclosed. SPSS shall promptly update such Registration Statement and
the prospectus included therein in order to permit the shares of SPSS Common
Stock to be sold, and the Trading Period shall automatically be extended by the
aggregate number of days during which the Quantime Shareholders were instructed
to refrain from selling shares of SPSS Common Stock during all Blackout Periods.
3
<PAGE>
(b) The Quantime Shareholders shall cooperate with SPSS in
connection with the Registration and shall provide such information and execute
such documents as SPSS shall reasonably request in connection with the
Registration.
(c) SPSS shall not grant to any holder of shares of SPSS
Common Stock registration rights which interfere with the rights of the Quantime
Shareholders and the obligations of SPSS under this Article II.
(d) Prior to such date as financial results covering at least
thirty (30) days of post-Acquisition combined operations of SPSS and Quantime
have been published within the meaning of Section 201-01 of the SEC's
Codification of Financial Reporting Policies (such date is hereinafter referred
to as the "Earnings Release Date"), SPSS will not take any action for which it
would be required to file a Form 8-K under Item 1 or Item 2 thereof.
2.2 Sales of SPSS Common Stock by the Quantime Shareholders. If at any
time prior to the effectiveness of the Registration Statement any Quantime
Shareholder elects to sell all or any of his shares of SPSS Common Stock, such
Quantime Shareholder shall conduct such sales only through registered securities
brokers ("Brokers").
2.3 Registration Expenses. SPSS shall be responsible for and shall pay
all fees, costs and expenses incurred by it relating to the Registration,
including without limitation, all SEC and securities exchange, NASDAQ
registration and filing fees, and all fees and expenses of compliance by SPSS
with the federal securities laws or any applicable state blue sky laws, but not
including (i) any fees and expenses of the Quantime Shareholders' counsel or
otherwise incurred by the Quantime Shareholders, and (ii) underwriters' fees or
expenses, broker's costs, commissions and other similar disposition costs
associated with the SPSS Common Stock owned by any Quantime Shareholder.
2.4 Restricted Stock. Quantime has advised the Quantime
Shareholders, and the Quantime Shareholders understand and agree, as follows:
(a) That the shares of SPSS Common Stock to be received by the
Quantime Shareholders pursuant to this Agreement are not currently subject to a
registration statement under the Act, and are issued pursuant to exemptions from
registration under the Act which exemptions depend, among other things, on the
bona fide nature of their investment intent.
(b) That they shall not transfer the SPSS Common Stock to be
received by the Quantime Shareholders pursuant to this Agreement except in
compliance with the provisions of the Act. Any proposed transferee of the shares
of SPSS Common Stock shall agree to take and hold such securities upon the
conditions set forth in Section 2.4(c) hereof.
(c) Until such time as the shares being sold hereunder to the
Quantime Shareholders may be sold under Rule 144(k), each certificate
representing the shares of SPSS Common Stock issued to the Quantime Shareholders
shall be stamped or otherwise imprinted
4
<PAGE>
with a legend in substantially the following form (in addition to any legend
required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
IN A PRIVATE PLACEMENT. SUCH SHARES MAY NOT BE OFFERED, SOLD
OR TRANSFERRED IN THE UNITED STATES IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933 OR AN EXEMPTION THEREFROM OR IN CONTRAVENTION OF THE
AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER. COPIES OF THE AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT
ITS PRINCIPAL OFFICE.
When the shares being sold hereunder to the Quantime Shareholders may be sold
under the circumstances described in Rule 144(k) (or any successor rule or
regulation) and there exists no other restriction on the sale of stock imposed
subsequent to the date hereof, SPSS will, upon request of the Quantime
Shareholders, cause SPSS' transfer agent to exchange the shares legended as set
forth above for unlegended shares.
(d) Unless a registration statement under the Act covering
transactions in the SPSS Common Stock to be received by the Quantime
Shareholders pursuant to this Agreement has been declared effective by the SEC
and such registration statement remains effective at the time of transfer, each
holder of shares of SPSS Common Stock to be received by the Quantime
Shareholders pursuant to this Agreement shall comply in all respects with the
provisions of this Section 2.4. Prior to any proposed transfer of any such
securities, the holder thereof shall give written notice to SPSS of such
holder's intention to effect such transfer and shall comply with the
requirements set forth in the balance of this section. Each such notice shall
describe the manner and circumstances of the proposed transfer in reasonable
detail, and shall be accompanied by (i) a written opinion of legal counsel who
shall be reasonably satisfactory to SPSS, addressed to SPSS, and reasonably
satisfactory in form and substance to SPSS' counsel, to the effect that the
proposed transfer of such securities may be effected without registration under
the 1933 Act, (ii) a "no action" letter from the SEC to the effect that the
distribution of such securities without registration will not result in a
recommendation by the staff of the SEC that action be taken with respect
thereto, or (iii) such other showing satisfactory to SPSS and its counsel that
the proposed transfer of such securities may be effected without registration
under the 1933 Act, whereupon the holder of such securities shall be entitled to
transfer such securities in accordance with the terms of the notice delivered by
the holder to SPSS.
2.5 Indemnification; Contribution. In the event any SPSS Common
Stock held by a Quantime Shareholder is included in a registration statement
under this Article II:
5
<PAGE>
(a) SPSS will indemnify and hold harmless such Quantime
Shareholder, any underwriter (as defined in the Act) for such Quantime
Shareholder and each person, if any, who controls such Quantime Shareholder or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, liabilities (joint or several) or expenses to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, liabilities (or actions in respect
thereof) or expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by SPSS of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934 Act
or any state securities law; and SPSS will pay to each such Quantime
Shareholder, underwriter or controlling person, any and all legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 2.5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, action
or expense if such settlement is effected without the consent of SPSS, which
consent shall not be unreasonably withheld, nor shall SPSS be liable in any such
case for any such loss, claim, damage, liability, action or expense to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished by such
Quantime Shareholder or any controlling person of such Quantime Shareholder
expressly for use in connection with such registration.
(b) Such Quantime Shareholder will indemnify and hold
harmless SPSS, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls SPSS within the
meaning of the Act, any underwriter, and any controlling person of any such
underwriter, against any losses, claims, damages, liabilities (joint or several)
or expenses to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, liabilities (or actions in respect thereto) or expenses arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Quantime Shareholder expressly for use in
connection with such registration; and such Quantime Shareholder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 2.5(b), in connection with
investigating or defending any such loss, claim, damage, liability, action or
expense; provided, however, that the indemnity agreement contained in this
subsection 2.5(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, action or expense if such settlement is effected
without the consent of such Quantime Shareholder, which consent shall not be
unreasonably withheld or delayed; provided, that, in no event shall any
indemnity under this subsection 2.5(b) exceed the gross proceeds from the
offering of the shares of SPSS Common Stock received by such Quantime
Shareholder. SPSS
6
<PAGE>
shall make the Registration Statement available to the Quantime Shareholders for
comment prior to the filing thereof.
(c) Promptly after receipt by an indemnified party under this
Section 2.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.5, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to a conflict of interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 2.5.
(d) If the indemnification provided for in this Section 2.5
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative faults of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include any fees,
charges or expenses (including fees, disbursements and other charges of legal
counsel) reasonably incurred by such party in connection with any investigation
or proceeding. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person.
2.6 Additional Obligations of SPSS. With respect to any
registration hereunder, SPSS shall:
7
<PAGE>
(a) furnish to the Quantime Shareholders such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of shares of SPSS Common Stock
owned by them;
(b) use reasonable efforts to qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably appropriate for the distribution of
the securities covered by the registration statement;
(c) use reasonable efforts to notify the NASDAQ Stock Market
of the issuance of the shares of SPSS Common Stock covered by such registration
statement and list such shares; and
(d) notify each Quantime Shareholder of shares of SPSS Common
Stock under such registration statement as promptly as possible, at any time
when a prospectus relating thereto is required to be delivered under the Act, of
the happening of any event of which SPSS has knowledge as a result of which the
prospectus contained in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.
2.7 Reports Under the Exchange Act. With a view to making available to
the Quantime Shareholders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Quantime
Shareholder to sell securities of SPSS to the public without registration, SPSS
agrees to use its reasonable efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and
other documents required of SPSS under the Act and the Exchange Act; and
(c) furnish to any Quantime Shareholder forthwith upon request
a written statement by SPSS that it has complied with the reporting requirements
of Rule 144 and of the Act and the Exchange Act, a copy of the most recent
annual or quarterly report of SPSS, and such other reports and documents so
filed by SPSS as may be reasonably requested in availing any Quantime
Shareholder of any rule or regulation of the SEC permitting the selling of any
securities of SPSS held by it without registration.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SPSS
SPSS represents and warrants to the Quantime Shareholders as follows:
3.1 Organization and Qualification. SPSS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby.
3.2 Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by SPSS and, no other corporate proceedings on the part of SPSS are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by SPSS and constitute legal, valid and binding agreements of SPSS.
3.3 Consents and Approvals. There is no authorization, consent, order
or approval of, or notice to or filing with, any individual or entity required
to be obtained or given in order for SPSS to consummate the transactions
contemplated hereby and fully perform its obligations hereunder.
3.4 Absence of Conflicts. The execution, delivery and performance by
SPSS of this Agreement (including, without limitation, the offering, issuance
and sale of the Acquisition Stock) and the consummation by SPSS of the
transactions contemplated hereby will not, with or without the giving of notice
or the lapse of time, or both, (i) violate any provision of law, statute, rule
or regulation to which SPSS is or was subject, (ii) violate any order, judgment
or decree which is or was applicable to SPSS or (iii) conflict with, or result
in a breach or default under, any term or condition of the Certificate of
Incorporation or By-Laws of SPSS or any agreement or other instrument to which
SPSS is a party or by which SPSS is bound.
3.5 Acquisition Stock. The Acquisition Stock, when delivered in
accordance with this Agreement, shall be duly authorized, validly issued, fully
paid and nonassessable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE QUANTIME SHAREHOLDERS
The Quantime Shareholders severally represent and warrant to SPSS as
follows:
4.1 Authority. The Quantime Shareholders, on their own behalf,
and the attorneys-in-fact executing and delivering this Agreement on behalf of
any such Quantime Shareholders, have
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<PAGE>
full power, capacity and authority (corporate or otherwise) to execute and
deliver this Agreement, and all documents and instruments executed and delivered
in connection therewith, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and such other
documents and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized and approved by all necessary
action on the part of each of the Quantime Shareholders and no other proceedings
(corporate or otherwise) on the part of any of the Quantime Shareholders are
necessary to authorize this Agreement and such documents or to consummate the
transactions contemplated hereby and thereby. This Agreement and the other
agreements contemplated by this Agreement have been duly and validly executed
and delivered by or on behalf of each of the Quantime Shareholders and
constitute legal, valid and binding agreements of the Quantime Shareholders.
ARTICLE V
COVENANTS OF THE QUANTIME SHAREHOLDERS
The Quantime Shareholders, jointly and severally, covenant as follows:
5.1 Consents and Approvals. The Quantime Shareholders agree to use all
reasonable efforts to make all registrations, filings and applications, and give
all notices and obtain all governmental and other consents, approvals, orders,
qualifications and waivers necessary for the consummation of the transactions
contemplated by, or the performance by the Quantime Shareholders of any of their
obligations under, this Agreement, or which may become reasonably necessary or
desirable in connection with any of the foregoing, in each case upon terms and
conditions reasonably satisfactory to SPSS and its counsel. The Quantime
Shareholders waive any pre-emption rights and rights of first refusal in
relation to the Shares, whether under the Articles of Association of Quantime or
otherwise.
5.2 Cost of Shares. Upon request by SPSS, the Quantime Shareholders
will provide SPSS with information relating to, and including, the consideration
paid by the Quantime Shareholders for the Shares owned by the Quantime
Shareholders at the time of acquisition of such Shares.
5.3 Further Assurances. The Quantime Shareholders shall from time to
time, at the request of SPSS and without further cost or expense to SPSS,
execute and deliver such other documents and take such other actions as shall be
reasonably necessary or appropriate to consummate fully the transactions
contemplated hereby.
5.4 Power of Attorney. Pending the entry of SPSS onto Quantime's share
register, each of the Quantime Shareholders will grant to SPSS an irrevocable
power of attorney to exercise all rights relating to the Shares to the same
extent and with the same effect as if SPSS had been entered on such share
register.
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ARTICLE VI
COVENANTS OF SPSS
SPSS covenants as follows:
6.1 Further Assurances. SPSS shall from time to time execute and
deliver such other documents and take such other actions as shall be reasonably
necessary or appropriate to consummate fully the transactions contemplated
hereby.
ARTICLE VII
MUTUAL COVENANTS
Each of the parties hereto covenants as follows:
7.1 Confidentiality. Except as otherwise required by law or judicial or
administrative proceedings, including proceedings between the parties with
respect to the transactions contemplated hereby, and then only to the extent
specifically required by such proceedings, and except for public announcements
on the advice of counsel, each of the parties agrees not to (i) disclose any
Confidential Information (defined hereinbelow) of any other party, or the terms
of this Agreement, to any individual or entity (other than its directors,
officers, employees, agents and representatives with a need to know such
Confidential Information in order to consummate the transactions contemplated
hereby and then only if reasonable steps are taken with such parties to preserve
the confidentiality thereof) or (ii) use any Confidential Information for any
purpose other than, with respect to SPSS operating the acquired business.
"Confidential Information" shall mean any secret or confidential information of
the software business of Quantime or SPSS, including, but not limited to,
customer information, financial information, technical information, details or
information concerning contracts, trade secrets, marketing information or any
other data, information or proprietary information of or relating to the
software business of Quantime or SPSS or any affiliate thereof, or their
respective products or services. No obligations shall exist under this Agreement
with respect to Confidential Information that (i) is publicly known at the time
of the disclosure or becomes publicly known through no wrongful act or failure
of Quantime, the Quantime Shareholders or SPSS, (ii) is disclosed by a third
party which does not have a confidential relationship with either Quantime, the
Quantime Shareholders or SPSS, and which was rightfully acquired by a third
party, or (iii) is legally compelled to be disclosed pursuant to a subpoena,
summons, order or other judicial or governmental process, provided that the
parties hereto provide prompt notice of any such subpoena, summons, order or
other judicial or governmental process to such other parties of the Confidential
Information, so as to allow the parties an opportunity to oppose such process.
7.2 Consistent Tax Reporting. The parties agree for tax purposes
to report the transactions contemplated by this Agreement, and to treat any
subsequent related transactions
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or items, in a manner consistent in all respects with the terms and provisions
of this Agreement. Each party shall cooperate with the other parties as
appropriate for all relevant tax purposes relating to the transactions
contemplated by this Agreement.
ARTICLE VIII
CLOSING DELIVERIES
The following deliveries shall be made at the Closing:
8.1 Delivery of Share Certificates and Stock Transfers. The
Quantime Shareholders shall deliver to SPSS the share certificates and related
signed stock transfers in respect of the other Shares.
8.2 Delivery of Closing Documents. The Quantime Shareholders shall
deliver to SPSS all other instruments and documents required hereunder.
8.3 Consents. The Quantime Shareholders shall deliver to SPSS all
consents and approvals required in connection with the performance by the
Quantime Shareholders of their respective obligations under this Agreement and
the consummation by the Quantime Shareholders of the transactions contemplated
hereby and thereby. SPSS shall deliver to the Quantime Shareholders all consents
and approvals required in connection with the performance by SPSS of its
obligations under this Agreement and the consummation by SPSS of the
transactions contemplated hereby and thereby.
8.4 Repayment of Amounts Owed. The Quantime Shareholders shall repay,
or cause to be repaid, all amounts owing on the Closing Date to Quantime and the
subsidiaries of Quantime from the directors of any of them and from the Quantime
Shareholders, whether due for payment or not.
8.5 Resolutions of Certain Quantime Shareholders. Each Quantime
Shareholder that is not an individual or is not acting individually and on his
or her own behalf, shall execute and deliver to SPSS certified resolutions
authorizing the execution and delivery by such Quantime Shareholder of this
Agreement and the documents related thereto, and performance by such Quantime
Shareholder of the transactions contemplated hereby and thereby.
8.6 Further Assurances. Each party shall deliver, or cause to be
delivered, all other documents required to be delivered by it at the Closing to
the other party and shall take all other actions which the other parties may
reasonably determine necessary or appropriate in order to consummate fully the
transactions contemplated hereby.
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ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1 Survival of Representations and Warranties: Covenants. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the Closing Date until the earlier of the
first anniversary of the Closing Date or the date of delivery to SPSS of SPSS'
year-end audited financial statements by SPSS' outside auditors (the "Audit
Release Date"). All covenants contained herein shall survive until performed
fully.
9.2 Indemnification.
(a) Subject to and as modified by Section 9.2(b), the Quantime
Shareholders agree to indemnify and hold SPSS and its affiliates and the
respective officers, directors, employees, agents and representatives of each of
the foregoing (collectively, the "Representatives") harmless from and against
any and all costs, expenses, losses, claims, damages, interest, penalties,
fines, liabilities and obligations whenever arising or incurred (including,
without limitation, amounts paid in settlement, costs of investigation and
attorneys' fees and expenses) (individually, a "Loss," and collectively,
"Losses") arising out of or relating to any breach of any representation,
warranty or covenant made by the Quantime Shareholders set forth herein.
(b) The aggregate of all indemnities to be provided to SPSS
pursuant to this Article IX (an "Indemnification Payment") shall not exceed an
amount equal to ten percent (10%) of the Total Shares (the "Cap").
Notwithstanding the foregoing, the Cap shall not apply to the indemnities
provided in this Agreement for any fraud, willful misconduct, gross negligence
or criminal action on the part of the Quantime Shareholder engaging in such
fraud, willful misconduct, gross negligence or criminal action, and
notwithstanding anything contained or implied in this Agreement, the indemnity
obligations set forth herein above in this sentence shall survive the Closing
without limitation except as provided by the applicable statute of limitations
(including any extension of said statute of limitations).
9.3 Indemnification by SPSS. SPSS agrees to indemnify and hold the
Quantime Shareholders and their affiliates and the respective officers,
directors, employees, agents and representatives of each of the foregoing
harmless from and against any and all Losses relating to any breach of any
representation, warranty or covenant of SPSS set forth herein. Any
indemnification made by SPSS under this section 9.3 shall be in SPSS Common
Stock, valued at the closing price of SPSS Common Stock on September 30, 1997.
9.4 Indemnification Procedure. (a) An indemnified party under this
Article IX shall give prompt written notice to the indemnifying party (when and
to the extent that the indemnified party has actual knowledge thereof) of any
condition, event or occurrence or the commencement of any action, suit or
proceeding for which indemnification may be sought, and through counsel
reasonably satisfactory to the indemnified party, shall assume the defense
thereof or other
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indemnification obligation with respect thereto; provided, however, that any
indemnified party shall be entitled to participate in any such action, suit or
proceeding with counsel of its own choice but at its own expense; and provided,
further, that any indemnified party shall be entitled to participate in any such
action, suit or proceeding with counsel of its own choice at the expense of the
indemnifying party, if, under applicable canons of ethics, joint representation
of the indemnifying party and the indemnified party presents a conflict of
interest.
In any event, if the indemnifying party fails to assume the defense
within a reasonable time, the indemnified party may assume such defense or other
indemnification obligation and the reasonable fees and expenses of its attorneys
will be covered by the indemnity provided for hereunder. No action, suit or
proceeding for which indemnification may be sought shall be compromised or
settled in any manner which might adversely affect the interests of the
indemnifying party without the prior written consent of the indemnifying party
(which shall not be unreasonably withheld); provided, however, that the
indemnified party may settle any claim or cause of action without the
indemnifying party's consent, but in such case the indemnifying party shall not
be required to reimburse the indemnified party for its Losses except and to the
extent that the results of arbitration, conducted in accordance with Section 9.5
hereof, determines that the indemnifying party must indemnify the indemnified
party therefor. Notwithstanding anything in this Section 9.4 to the contrary,
the indemnifying party shall not, without the prior written consent of the
indemnified party, (i) settle or compromise any action, suit or proceeding or
consent to the entry of any judgment which does not include as an unconditional
term thereof the delivery by the claimant or plaintiff to the indemnified party
of a written release from all liability in respect of such action, suit or
proceeding or (ii) settle or compromise any action, suit or proceeding in any
manner that may materially and adversely affect the indemnified party other than
as a result of money damages or other money payments. The indemnifying party
shall pay all expenses, including attorneys' fees, that may be incurred by any
indemnified party in enforcing the indemnity provided for hereunder.
9.5 Arbitration. Any dispute as to any claims under this Agreement
shall be settled by arbitration in Wilmington, Delaware by three arbitrators,
one of whom shall be appointed by the Quantime Shareholders, one by SPSS and the
third of whom shall be appointed by the first two arbitrators. If either party
fails to appoint an arbitrator within 30 days of a request in writing by the
other party to do so or if the first two arbitrators cannot agree on the
appointment of a third arbitrator within 20 days of their designation, then such
arbitrator shall be appointed by the Chief Judge of the United States District
Court for the District of Delaware. Except as to the selection of arbitrators
which shall be as set forth above, the arbitration shall be conducted promptly
and expeditiously in accordance with the commercial arbitration rules of the
American Arbitration Association so as to enable the arbitrators to render an
award within 90 days of the commencement of the arbitration proceedings.
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The costs of the arbitration and the arbitrator
shall be allocated as provided in the results of the arbitration.
9.6 Treatment as Adjustment of Purchase Price. Any indemnity
payment received by a party hereunder shall be treated as an adjustment of the
purchase price. However, in the event
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that the Internal Revenue Service, Inland Revenue or any other taxing authority
determines that such indemnity payment constitutes taxable gain or income to the
indemnified party, the indemnifying party shall increase the amount otherwise
required to be paid so that the indemnified party, receives, on an after-tax
basis, an amount equal to the amount it would have received had the indemnity
not resulted in taxable gain or income.
9.7 Limited Remedies. SPSS shall have no cause of action against the
Quantime Shareholders for matters arising out of the sale to SPSS of Shares of
Quantime other than the contractual remedies contained herein or in ancillary
documents executed and delivered in connection with the transactions
contemplated hereby, and claims sounding in fraud, misrepresentation under
United States laws, equitable estoppel and promissory estoppel. SPSS
acknowledges that it has not been induced to enter into this Agreement by any
representation, warranty, promise or assurance by the Quantime Shareholders or
any other person other than those specifically contained in this Agreement or in
ancillary documents executed and delivered in connection with the transaction
contemplated hereby.
ARTICLE X
MISCELLANEOUS
10.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented by written agreement of the
parties.
10.2 Waiver of Compliance. Any failure of the Quantime Shareholders on
the one hand, or SPSS, on the other, to comply with any obligation herein may be
expressly waived hereunder, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Any waiver must be in
writing and duly executed by the appropriate parties.
10.3 Expenses. Payment of the reasonable fees and expenses incurred by
the Quantime Shareholders solely in connection with the Acquisition of the
Shares of the Quantime Shareholders under this Agreement shall be made by SPSS.
SPSS agrees to pay the fees and disbursements of Simmons & Simmons in acting for
the Quantime Shareholders in relation to this Agreement.
10.4 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or by facsimile transmission (receipt
confirmed), one day after being sent by recognized overnight courier or delivery
service, freight prepaid, or five days after being mailed, certified or
registered mail, postage prepaid, return receipt requested:
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(a) If to I.M. Katz, G. Haslam, A.D. Renny, M. Klein,
H.J.S. Dyer, S. Wooderson, J. Rabson and/or R. Phillips, addressed to such
Quantime Shareholder, to:
c/o Quantime Limited
Maygrove House
67 Maygrove Road
London NW6 2EG, ENGLAND
Facsimile No.: 44 171 624 5297
(b) If to J. Almonacid, to:
J. Almonacid
c/o Quantime S.A. de C.V.
Paseo de la Reforma
90-4 Piso
Suite 405
Colonia Juarez
Mexico DF 06600
Facsimile No.: 00 52 5 535 6657
(c) If to Min Charitable Trust, to:
Min Charitable Trust
c/o Brown & Wood
Princes Court
7 Princes Street
London EC2R 8AQ, ENGLAND
Attention: Richard Cassell
Facsimile No.: 0171 796 1807
as to each of (a), (b) and (c), with a copy to:
Simmons & Simmons
14 Dominion Street
London EC2M 2RJ, ENGLAND
Attention: Jane Newman/Catherine Moss
Facsimile No.: 0171 628 2070
or to such other person or address as the Quantime Shareholders shall furnish to
SPSS in writing by notice given in the manner set forth above.
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(b) If to SPSS, to:
SPSS Inc.
444 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Edward Hamburg
Facsimile No.: (312) 329-3558
with a copy to:
Ross & Hardies
150 North Michigan Avenue, Suite 2500
Chicago, Illinois 60601
Attention: T. Stephen Dyer, Esq.
Facsimile No.: (312) 750-8600
or to such other person or address as SPSS shall furnish to the Quantime
Shareholders in writing by notice given in the manner set forth above.
10.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except by operation of law and except that SPSS may assign its rights and
obligations under this Agreement to any other entity wholly owned by SPSS. If
such assignment shall be made by SPSS, the assignee shall be entitled to all of
the rights and shall assume all of the obligations of SPSS hereunder, provided,
that SPSS shall remain liable for and guarantee the performance of such entity's
obligations under this Agreement and shall issue to the Quantime Shareholders
the SPSS Common Stock as provided herein.
10.6 Publicity. Neither the Quantime Shareholders nor SPSS shall make
or issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public, without the prior written consent of the
other parties, nor shall the Quantime Shareholders cause or permit Quantime to
do so. This provision shall not apply, however, to any announcement or written
statement required to be made by law, the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall, whenever practicable, consult with the other party
concerning the timing and content of such announcement before such announcement
is made.
10.7 Headings. The Article and Section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
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10.8 Severability. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with their
terms.
10.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to its
conflicts of law doctrine. The parties hereto expressly submit themselves to the
non-exclusive jurisdictions of the State and Federal Courts of Illinois for the
resolution of any disputes which may arise under or with respect to compliance
with this Agreement.
10.10 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.11 Third Parties. Nothing herein shall be construed to confer upon
or give to any party other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
10.12 References to Laws. References to particular statutes within this
Agreement, to the extent such references relate to laws other than the laws of
the United States or any particular State thereof, are intended to refer, and
shall be construed as referring, to laws of the United Kingdom.
10.13 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, sets forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and supersedes
all prior agreements, covenants, representations or warranties, whether oral or
written, by any party hereto.
10.14 Trustees. To the extent signatories hereto are trustees or
attorneys-in-fact, the parties acknowledge and agree that such persons are
executing and delivering this Agreement and consummating the transactions
contemplated hereby solely in their capacity as such trustees and
attorneys-in-fact and not individually, and further, that said trustees and
attorneys-in-fact shall have no personal liability in connection therewith. With
respect to Quantime Shareholders which are trusts or foundations, claims under
the Agreement are limited to trust assets and the Shares and no claims will be
made against the trustees, attorneys-in-fact and officers acting in their
capacity as such. The provisions of this Section 10.14 shall apply with equal
force to and shall be deemed to be incorporated by reference in all ancillary
documents signed by signatories who are trustees or attorneys-in-fact and who
execute any ancillary documents in connection with the transactions contemplated
by this Agreement.
10.15 Investment in the Common Stock. As of the Closing Date, each of
the Quantime Shareholders (as to himself or herself and not as to any other
Quantime Shareholder): (i) has received and carefully reviewed copies of the
SPSS Reports (hereinafter defined); (ii) has evaluated, and/or his or her
business, tax and/or other legal advisors have evaluated and advised
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such Quantime Shareholder as to the merits, disadvantages and risks of an
investment in SPSS Common Stock; (iii) acknowledges that, in reliance upon these
representations, SPSS is not registering the issuance of the SPSS Common Stock
under the Act prior to the Closing Date; (iv) acknowledges that the SPSS Common
Stock may not be resold except in a transaction which is registered under the
Act or which is exempt from such registration requirements and that SPSS will
cause a legend setting forth such restrictions to be placed on each certificate
representing the SPSS Common Stock and will make appropriate notations in its
records and the records of its transfer agent with respect thereto; (v)
recognizes the speculative nature of the SPSS Common Stock and is able to bear
the economic risk of the investment he or she is making in SPSS Common Stock by
reason of the transactions contemplated by this Agreement; (vi) is acquiring the
SPSS Common Stock for his or her own account, as principal, for investment
purposes only and without a view to the resale, transfer or other distribution
thereof except in a sale registered under the Act or in a transaction exempt
from the registration requirements of the Act; (vii) acknowledges that the
Acquisition Stock of SPSS being acquired pursuant to the terms of this Agreement
represents an investment in the business of SPSS, and that SPSS has made no
representations or warranties with respect to the future business performance of
SPSS or the price of its Common Stock; and (viii) has been afforded an
opportunity to ask questions and receive answers concerning SPSS and its
operations, business and financial condition, the SPSS Common Stock and the
terms and conditions of this Agreement and has received any additional
information concerning SPSS and its operations, business and financial
condition, the SPSS Common Stock and this Agreement that such Quantime
Shareholder has reasonably requested.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as an agreement under hand (in the case of SPSS) and
as a deed (in the case of the Quantime Shareholders), all as of the day and year
first written above.
SPSS:
SPSS INC., a Delaware corporation
By: /s/ Jack Noonan
Name: Jack Noonan
Title: President
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THE QUANTIME SHAREHOLDERS:
/s/ I.M. KATZ /s/ G. Haslam
I.M. KATZ G. HASLAM
/s/ A.D. Renny /s/ M. Klein
A.D. RENNY M. KLEIN
/s/ H.J.S. Dyer /s/ S. Wooderson
H.J.S. DYER S. WOODERSON
/s/ J. Rabson /s/ R. Phillips
J. RABSON R. PHILLIPS
/s/ J. Almonacid
J. ALMONACID
TRUSTEES OF MIN CHARITABLE TRUST
By: /s/ Richrad A. Cassell
Name: Richard A. Cassell
Title: Trustee
By:
Name:
Title:
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SCHEDULE 1.3
Min Charitable Trust 16,007
I.M. Katz 9,530
G. Haslam 609
A.D. Renny 536
M. Klein 432
H.J.S. Dyer 254
S. Wooderson 229
J. Rabson 229
J. Almonacid 197
R. Phillips 152
22
EXHIBIT 2.2
STOCK PURCHASE AGREEMENT
By and Among
SPSS INC.,
JENS NIELSEN, HENRIK ROSENDAHL,
OLE STANGEGAARD, LARS THINGGAARD, EDWARD O'HARA,
BJORN HAUGLAND, 2M INVEST
and the Shareholders listed on Exhibit A
Dated as of November 21, 1997
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of November 21, 1997, (the
"Agreement"), by and among Jens Nielsen, Henrik Rosendahl, Ole Stangegaard, Lars
Thinggaard, Edward O'Hara, Bjorn Haugland, 2M Invest (the "Key Shareholders")
and certain other shareholders of In2itive listed on Exhibit A (when taken
together with the Key Shareholders, the "Shareholders"), and SPSS Inc., a
Delaware corporation ("SPSS").
W I T N E S E T H:
WHEREAS, In2itive Technologies A/S, a Danish corporation ("In2itive")
is engaged in the business of developing and distributing software;
WHEREAS, the respective Boards of Directors of In2itive and SPSS have
determined that it is advisable and for the benefit of their corporations and
their respective shareholders that In2itive be acquired by SPSS by means of the
acquisition of all the outstanding capital stock of In2itive, DKK50 par value
per share, on the terms and conditions set forth hereinafter (the "Shares"),
held by the Shareholders in exchange for shares of common stock, $.01 par value
per share of SPSS (the "SPSS Common Stock"), to be determined pursuant to the
terms set forth herein;
WHEREAS, the Shareholders own of record and beneficially all of the
issued and outstanding Shares; and
WHEREAS, for accounting purposes, it is intended that this transaction
be accounted for as a "pooling of interests".
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and in reliance upon
the representations and warranties contained herein, the parties hereto agree as
follows:
ARTICLE I
TERMS OF PURCHASE AND SALE
1.1 Purchase and Sale of the Shares. Subject to the terms and
conditions contained in this Agreement and the attached schedules which shall
form an integral part of this Agreement, on the Closing Date (as hereinafter
defined), the Shareholders shall sell, assign, transfer and deliver the Shares
to SPSS and SPSS shall purchase the Shares from the Shareholders, for the
aggregate purchase price set forth in Section 1.2 hereof (the "Purchase Price")
payable pursuant to the terms provided in Section 1.2 hereof.
1.2 Payment of Purchase Price. Upon satisfaction
of all the terms and conditions set forth in this Agreement, on the Closing date
SPSS shall deliver the Purchase Price.
<PAGE>
consisting of 145,000 shares of SPSS Common Stock, reduced by the number of
shares of SPSS Common Stock having an aggregate value on the Closing Date
(calculated based upon the closing price of SPSS Common Stock on November 3,
1997) not to exceed $99,163, representing the fees and expenses to be borne by
the Shareholders in respect hereof and paid by SPSS, as more fully described in
Section 16.3 hereof (the "Total Shares"), to be paid as follows (a) the
Shareholders shall receive an aggregate of ninety percent (90%) of the Total
Shares to be allocated between the Shareholders as set forth in Schedule 1.2
hereof, and (b) ten percent (10%) of the Total Shares (the "Escrowed Shares")
shall be held in escrow in accordance with Article III hereof. Only whole shares
of SPSS Common Stock will be issued in connection with the Acquisition. In lieu
of fractional shares, each Shareholder otherwise entitled to a fractional share
of SPSS Common Stock will be paid in cash an amount equal to the amount of such
fraction multiplied by the closing price of SPSS Common Stock on November 3,
1997. No such shareholder will be entitled to dividends, voting rights or other
rights in respect of any such fractional share.
1.3 Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated hereby (the "Closing")
shall take place at the offices of Gorrissen Federspiel Kierkegaard, H.C,
Copenhagen, Denmark, at 9:00 a.m., on November 21, 1997 (the "Closing Date") or
such other place or time as the parties may agree.
1.4 Accounting. The parties hereto shall each use
their best efforts to cause the transactions contemplated hereunder to qualify
for accounting treatment as a pooling of interests.
ARTICLE II
SHAREHOLDERS' REPRESENTATIVE
2.1 In order to administer efficiently (i) the implementation
of the Agreement by the Shareholders, (ii) the waiver of any condition to the
obligations of the Shareholders to consummate the transactions contemplated
hereby, and (iii) the settlement of any dispute with respect to the Agreement,
the Shareholders hereby designate Ole Stangegaard, as their representative (the
"Shareholders' Representative").
2.2 The Shareholders hereby authorize the Shareholders'
Representative (i) to take all action necessary in connection with the
implementation of the Agreement on behalf of the Shareholders, the waiver of any
condition to the obligations of the Shareholders to consummate the transactions
contemplated hereby, or the settlement of any dispute, (ii) to give and receive
all notices required to be given under the Agreement and (iii) to take any and
all additional action as is contemplated to be taken by or on behalf of the
Shareholders by the terms of this Agreement. Such authorization granted by the
shareholders to the Shareholders' Representative shall remain effective until
December 31, 1998.
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2.3 In the event (i) that the Shareholders' Representative
dies, becomes legally incapacitated or resigns from such position, or (ii) upon
a written consent executed by at least 66 2/3% in interest (calculated based on
the allocation set for in Schedule 1.2 hereof, notwithstanding any subsequent
change in shareholdings by way of sale, etc.) of the Shareholders, the
Shareholders may designate a replacement to the Shareholders' Representative;
however, no change in the Shareholders' Representative shall be effective until
SPSS is given notice of it by the Shareholders.
2.4 All decisions and actions by the Shareholders'
Representative shall be binding upon all of the Shareholders, and no Shareholder
shall have the right to object, dissent, protest or otherwise contest the same,
in the absence of fraud, gross negligence or willful misconduct of the
Shareholders' Representative.
2.5 By their execution of this Agreement, the Shareholders
agree that:
(i) SPSS shall be able to rely conclusively on the
instructions and decisions of the Shareholders' Representative as to
any actions required or permitted to be taken by the Shareholders or
the Shareholders' Representative hereunder, and no party hereunder
shall have any cause of action against SPSS for any action taken by
SPSS in reliance upon the instructions or decisions of the
Shareholders' Representative;
(ii) all actions, decisions and instructions of the
Shareholders' Representative shall be conclusive and binding upon all
of the Shareholders; no Shareholder shall have any cause of action
against SPSS or In2itive for any action taken or omitted to be taken,
decision made or omitted to be made or any instruction given or omitted
to be given by the Shareholders' Representative; and no Shareholder
shall have any cause of action against the Shareholders' Representative
for any action taken, decision made or instruction given by the
Shareholders' Representative under this Agreement, except for fraud,
gross negligence or willful breach of this Agreement by the
Shareholders' Representative;
(iii) remedies available at law for any breach of the
provisions of this Section 2.5 are inadequate; therefore, SPSS shall be
entitled to temporary and permanent injunctive relief without the
necessity of proving damages if SPSS brings an action to enforce the
provisions of this Section 2.5; and
(iv) the provisions of this Section 2.5 are
independent and severable, shall constitute an irrevocable power of
attorney, coupled with an interest and surviving death, granted by the
Shareholders to the Shareholders' Representative and shall be binding
upon the executors, heirs, legal representatives and successors of each
Shareholder.
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ARTICLE III
ESCROW
3.1 Escrow. At Closing, SPSS shall cause to be issued, in the
name of each Shareholder newly issued shares of SPSS Common Stock as set forth
on Schedule 3.1. SPSS will hold in escrow for the Shareholders' account, in the
respective amounts set forth on Schedule 3.1, the Escrowed Shares, together with
stock powers duly executed in blank attached, in good form for delivery. SPSS
will hold the Escrowed Shares subject to the terms and conditions of Section 3.2
hereof.
3.2 Escrowed Shares. Upon the Closing Date, the Shareholders
shall, pledge, and grant a first priority security interest in the Escrowed
Shares to SPSS as collateral to satisfy any post-Closing claims for breaches
under this Agreement. Escrowed Shares used to satisfy any post-Closing claims
for breaches under this Agreement shall be divided on a pro-rata basis from the
Shareholders. The number of Escrowed Shares, if any, remaining after any
retention made in accordance with this Agreement will be delivered to the
Shareholders, in amounts proportionate to the Shareholders' interest in such
Escrowed Shares, promptly after the earlier of the first anniversary of the
Closing Date or the date of delivery to SPSS of SPSS' year-end audited financial
statements by SPSS' outside auditors (the "Audit Release Date"), except for the
number of such Escrowed Shares then subject to a bona fide dispute over which a
party is entitled to such Escrowed Shares.
ARTICLE IV
SECURITIES MATTERS
4.1 Registration of SPSS Common Stock.
(a) SPSS shall prepare and file with United States Securities
and Exchange Commission (the "SEC") as soon as practicable but in no
event later than 30 days following the Audit Release Date, a
registration statement on Form S-3 (together with all amendments and
supplements to any such registration statement, including
post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such registration
statement, the "S-3 Registration Statement"), or such other appropriate
registration statement under the Securities Act of 1933, as described
in greater detail below, and the rules and regulations promulgated
thereunder (the "1933 Act" or the "Act"), for the registration (the
"Registration") of the secondary offering of the SPSS Common Stock for
the account of the Shareholders. SPSS expects to have published
unaudited financial results, covering at least thirty (30) days of the
combined operations of SPSS and In2itive following the acquisition of
In2itive by SPSS (the "Acquisition"), not later than March 31, 1998.
SPSS shall use reasonable efforts to have the Registration declared
effective by the SEC promptly after unaudited financial results
covering at least
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thirty (30) days of the combined operations of SPSS and In2itive
following the Acquisition have been publicly released by SPSS. SPSS
shall take such steps as are reasonably required to register such SPSS
Common Stock for sale on a delayed or continuous basis under Rule 415
of the 1933 Act and, provided that Form S-3 shall be available to SPSS
for the Registration, to keep such Registration Statement continuously
effective for a period of twenty-four (24) months following the date of
effectiveness, or such shorter period that will terminate when all of
the shares of SPSS Common Stock have been sold by the Shareholders (the
"Trading Period"). In the event Form S-3 is not available to SPSS for
the Registration, SPSS shall, at the written request of the
Shareholders holding a majority of the SPSS Common Stock, prepare one
(1) company paid (excluding any underwriting fees and discounts)
registration statement on the appropriate form, together with all
amendments and supplements to any such registration statement,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
registration statement (a "Non-S-3 Registration Statement", with the
S-3 Registration Statement and a Non-S-3 Registration Statement
referred to herein as the "Registration Statement"), and SPSS shall use
all reasonable efforts to maintain the effectiveness of such Non-S-3
Registration Statement for a period of 90 days after the date of
initial effectiveness. While such Registration Statement remains in
effect, SPSS may at any time deliver to any Shareholders in the
employment of SPSS, written notice to the effect that sales may not be
effected under the Registration Statement for a period of time the
"Blackout Period") because of the existence of material facts not
disclosed or incorporated by reference in such Registration Statement
and in the then-current prospectus included therein or because SPSS has
received an opinion of counsel that such sales may violate provisions
of the United States Securities Laws; upon receipt of any such notice,
such Shareholders shall refrain from selling any shares of SPSS Common
Stock under such Registration Statement until they have received notice
from SPSS to the effect that such sales may then be effected. In no
event shall the Blackout Period be greater than any similar period of
time during which SPSS restricts any of its employees from effecting
sales in SPSS Common Stock because of the existence of material facts
not disclosed or incorporated by reference in any then- effective
registration statement and in the then-current prospectus included
therein or otherwise not publicly disclosed. SPSS shall promptly update
such Registration Statement and the prospectus included therein in
order to permit the shares of SPSS Common Stock to be sold, and the
Trading Period shall automatically be extended by the aggregate number
of days during which the Shareholders were instructed to refrain from
selling shares of SPSS Common Stock during all Blackout Periods. The
Blackout Period, as used herein shall be defined as the current
Blackout Period policy currently in effect at SPSS.
(b) The Shareholders shall cooperate with SPSS in connection
with the Registration and shall provide such information and execute
such documents as SPSS shall reasonably request in connection with the
Registration.
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(c) SPSS shall not grant to any holder of shares of SPSS
Common Stock registration rights which interfere with the rights of
Shareholders and the obligations of SPSS under this Article IV of this
Agreement.
4.2 Sales of SPSS Common Stock by Shareholders. If at any time
any Shareholder elects to sell all or any of his shares of SPSS Common Stock,
Shareholder shall conduct such sales only through registered securities brokers
("Brokers").
4.3 Registration Expenses. SPSS shall be responsible for and
shall pay all fees, costs and expenses incurred by it relating to the
Registration, including without limitation, all SEC and securities exchange,
NASDAQ registration and filing fees, and all fees and expenses of compliance by
SPSS with the federal securities laws or any applicable state blue sky laws, but
not including (i) any fees and expenses of Shareholders' counsel or otherwise
incurred by Shareholders, and (ii) underwriters' fees or expenses, broker's
costs, commissions and other similar disposition costs associated with the SPSS
Common Stock owned by any Shareholder.
4.4 Restricted Stock. In2itive has advised the Shareholders,
and the Shareholders understand and agree, as follows:
(a) That the shares of SPSS Common Stock to be received by the
Shareholders pursuant to this Agreement are not currently subject to a
registration statement under the Act, and are issued pursuant to
exemptions from registration under the Act which exemptions depend,
among other things, on the bona fide nature of their investment intent.
(b) That they shall not transfer the SPSS Common Stock to be
received by the Shareholders pursuant to this Agreement except in
compliance with the provisions of the Act. Any proposed transferee of
the shares of SPSS Common Stock shall agree to take and hold such
securities upon the conditions set forth in 4.4(c) hereof.
(c) Until such time as the Shares being sold hereunder to the
Shareholders may be sold under Rule 144(k), each certificate
representing the shares of SPSS Common Stock issued to the Shareholders
shall be stamped or otherwise imprinted with a legend in substantially
the following form (in addition to any legend required under applicable
state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT UNDER AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933. SUCH SHARES MAY
NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN
EXEMPTION THEREFROM OR IN CONTRAVENTION OF THE AGREEMENT
COVERING THE
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PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER.
COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL OFFICE.
When the shares being sold hereunder to the Shareholders may be sold under the
circumstances described in Rule 144(k) (or any successor rule or regulation) and
there exists no other restriction on the sale of stock imposed subsequent to the
date hereof, SPSS will, upon request of the Shareholders' Representative, cause
SPSS' transfer agent to exchange the shares legended as set forth above for
unlegended shares.
(d) Unless a registration statement under the Act covering
transactions in the SPSS Common Stock to be received by the
Shareholders pursuant to this Agreement has been declared effective by
the SEC and such registration statement remains effective at the time
of transfer, each holder of shares of SPSS Common Stock to be received
by the Shareholders pursuant to this Agreement shall comply in all
respects with the provisions of this Section 4.4. Prior to any proposed
transfer of any such securities, the holder thereof shall give written
notice to SPSS of such holder's intention to effect such transfer and
shall comply with the requirements set forth in the balance of this
section. Each such notice shall describe the manner and circumstances
of the proposed transfer in reasonable detail, and shall be accompanied
by (i) a written opinion of legal counsel who shall be reasonably
satisfactory to SPSS, addressed to SPSS, and reasonably satisfactory in
form and substance to SPSS' counsel, to the effect that the proposed
transfer of such securities may be effected without registration under
the 1933 Act, (ii) a "no action" letter from the SEC to the effect that
the distribution of such securities without registration will not
result in a recommendation by the staff of the SEC that action be taken
with respect thereto, or (iii) such other showing satisfactory to SPSS
and its counsel that the proposed transfer of such securities may be
effected without registration under the 1933 Act, whereupon the holder
of such securities shall be entitled to transfer such securities in
accordance with the terms of the notice delivered by the holder to
SPSS.
4.5 Indemnification. In the event any SPSS Common Stock held
by a Shareholder is included in a registration statement under this Article IV:
(a) SPSS will indemnify and hold harmless such Shareholder,
any underwriter (as defined in the Act) for such Shareholder and each person, if
any, who controls such Shareholder or underwriter within the meaning of the Act
or the 1934 Act, against any losses, claims, damages, liabilities (joint or
several) or expenses to which they may become subject under the Act, the 1934
Act or other federal or state law, insofar as such losses, claims, damages,
liabilities (or actions in respect thereof) or expenses arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
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including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by SPSS of the Act, the 1934 Act, any state securities law or any rule
or regulation promulgated under the Act, the 1934 Act or any state securities
law; and SPSS will pay to each such Shareholder, underwriter or controlling
person, any and all legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; and SPSS will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 4.5(a), in connection with investigating or defending any
such loss, claim, damage, liability, action or expense provided, however, that
the indemnity agreement contained in this subsection 4.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, action or
expense if such settlement is effected without the consent of SPSS, which
consent shall not be unreasonably withheld, nor shall SPSS be liable in any such
case for any such loss, claim, damage, liability, action or expense to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished by such
Shareholder or any controlling person of such Shareholder expressly for use in
connection with such registration.
(b) Such Shareholder will indemnify and hold harmless SPSS,
each of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls SPSS within the meaning of the Act,
any underwriter, and any controlling person of any such underwriter, against any
losses, claims, damages, liabilities (joint or several) or expenses to which any
of the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, liabilities
(or actions in respect thereto) or expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Shareholder expressly for use in connection with such
registration; and such Shareholder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 4.5(b), in connection with investigating or defending any
such loss, claim, damage, liability, action or expense; provided, however, that
the indemnity agreement contained in this subsection 4.5(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, action or
expense if such settlement is effected without the consent of such Shareholder,
which consent shall not be unreasonably withheld or delayed; provided, that, in
no event shall any indemnity under this subsection 4.5(b) exceed the gross
proceeds from the offering of the shares of SPSS Common Stock received by such
Shareholder. SPSS shall make the Registration Statement available to the
Shareholders prior to the filing thereof.
(c) Promptly after receipt by an indemnified party under this
Section 4.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 4.5, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the
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indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to a conflict of interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 4.5.
4.6 Additional Obligations of SPSS. With respect to
any registration hereunder, SPSS shall:
(a) furnish to the Shareholders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of shares of
SPSS Common Stock owned by them;
(b) use reasonable efforts to qualify the securities covered
by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement;
(c) notify NASDAQ of the issuance of the shares of
SPSS Common Stock covered by such registration statement; and
(d) notify each Shareholder of shares of SPSS Common Stock
under such registration statement as promptly as possible, at any time
when a prospectus relating thereto is required to be delivered under
the Act, of the happening of any event of which SPSS has knowledge as a
result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.
4.7 Reports Under the Exchange Act. With a view to making
available to the Shareholders the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the SEC that may at any time permit a
Shareholder to sell securities of SPSS to the public without registration, SPSS
agrees to use its reasonable efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times;
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(b) file with the SEC in a timely manner all reports and other
documents required of SPSS under the Act and the Exchange Act; and
(c) furnish to any Shareholder forthwith upon request a
written statement by SPSS that it has complied with the reporting
requirements of Rule 144 and of the Act and the Exchange Act, a copy of
the most recent annual or quarterly report of SPSS, and such other
reports and documents so filed by SPSS as may be reasonably requested
in availing any Shareholder of any rule or regulation of the SEC
permitting the selling of any securities of SPSS held by it without
registration.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders represent and warrant to SPSS that:
5.1 Organization and Qualification.
(a) In2itive is a corporation duly organized, validly
existing under the laws of the Danish Corporation Act ("DCA") and has
the corporate power and corporate authority to enter into this
Agreement, to consummate the transactions contemplated hereby, to own
or lease the properties and other assets which it presently owns or
leases and to carry on its business as presently conducted.
(b) The copy of the Articles of Incorporation, and all
amendments thereto, of In2itive, as certified by the Commerce and
Companies Registry and of the By-laws, as amended to date, of In2itive,
as certified by its Chairman of the Board, being delivered herewith to
SPSS, are true, complete and correct copies as amended and presently in
effect. All minutes and consents of the shareholders and directors of
In2itive are contained in the minute books of In2itive and said minute
books have been furnished to SPSS for examination at a reasonable time
prior to the Closing. No minutes or consents have been included in such
minute books since such examination by SPSS which have not heretofore
been furnished to SPSS and no corporate action not reflected in said
minute books has been taken.
(c) In2itive is licensed or qualified to do business in every
domestic and foreign jurisdiction where the failure to be licensed or
qualified would have a material adverse effect on the business of
In2itive (a "Material Adverse Effect").
(d) In2itive has no subsidiaries.
5.2 Authority. The Shareholders, as appropriate, have full
power, capacity and authority (corporate or otherwise) to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
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approved by each of the Shareholders and the Board of Directors of In2itive and
no other proceedings (corporate or otherwise) on the part of any of the
Shareholders or In2itive are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement and the other
agreements contemplated by this Agreement have been duly and validly executed
and delivered by each of the Shareholders and constitute legal, valid and
binding agreements of the Shareholders enforceable in accordance with its terms,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
5.3 Capitalization. The entire authorized capital stock of
In2itive consists solely of Shares in the nominal amount of DKK [3,261,750] of
which DKK [2,866,750] are A- Shares and DKK [395,000] are B-Shares which as of
the date of this Agreement are the only issued and outstanding Shares (the
"Outstanding Shares"). There are no other authorized shares of capital stock of
In2itive. The Shares represent the only equity interests of the Shareholders or
any other person or entity in In2itive. All of the issued and outstanding Shares
are owned of record and beneficially by the Shareholders in the respective
amounts set forth in Schedule 5.3. The Shares are subject to no restrictions on
transferability, other than the requirement to consent by the board of directors
of In2itive to a transfer of Shares as set forth in Section 4 of the Articles of
Association of In2itive. All of the outstanding Shares are duly authorized and
validly issued and outstanding, fully paid and non-assessable, and were not
issued in violation of any preemptive rights. There are no Shares in treasury,
and there are no Shares reserved for issuance. Except as set forth in Schedule
5.3, there are no outstanding options, warrants, conversion or other rights to
acquire from any of the Shareholders or In2itive, or any plans, contracts or
commitments providing for the issuance of, or the granting of, rights by any of
the Shareholders or In2itive to acquire: (i) any capital stock of In2itive
(whether issued or unissued) or (ii) any securities convertible into or
exchangeable for any capital stock of In2itive. Other than those disclosed on
Schedule 5.3, there are no agreements or understandings with respect to the
voting, holding or selling of any Shares of capital stock of In2itive, or any
contractual obligations of In2itive or any of the Shareholders with respect to
In2itive's capital stock. There are no voting trusts or proxies currently in
effect with respect to the Shares.
The Key Shareholders agree that In2itive will use its best
efforts to obtain the exercise or termination of all outstanding options for
In2itive shares, if any, on or prior to the Closing Date. SPSS will not assume,
substitute for, or continue any options for In2itive stock outstanding on the
closing date (hereinafter the "Remaining Options").
5.4 Title to Shares. The Shareholders own and have good and
marketable title to the Shares, free and clear of any lien, pledge, claim,
encumbrance, restriction or right of any third party of any kind. On the Closing
Date, SPSS will acquire good and marketable title to the Shares, free and clear
as aforesaid, including without limitation any of the foregoing set forth in the
Bylaws of In2itive. The Shares represent the only equity interest of the
Shareholders in In2itive.
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5.5 Consents and Approvals. Except the consent by the Board of
Directors of In2itive to the transfer of the Shares, which consent has been
obtained and is in full force and effect, and as listed on Schedule 5.5, there
is no authorization, consent, order or approval of, or notice to or filing with,
any individual or entity required to be obtained or given by In2itive or the
Shareholders in order for the Shareholders to consummate the transactions
contemplated hereby and fully perform their obligations hereunder.
5.6 Absence of Conflicts. Other than listed on Schedules 5.8
and 5.16, the execution, delivery and performance by In2itive and the
Shareholders of this Agreement and the consummation by the Shareholders of the
transactions contemplated hereby will not, with or without the giving of notice
or lapse of time or both, (i) conflict with or result in a breach or default
under any term or condition of the Articles of Incorporation or By-laws of
In2itive, (ii) violate any provision of law, statute, rule or regulation to
which In2itive or the Shareholders is or was subject, (iii) violate any order,
judgment or decree which is or was applicable to In2itive or the Shareholders;
(iv) conflict with or result in a breach or default under any term or condition
of any agreement or other instrument to which In2itive or the Shareholders is a
party or by which either of them is bound, or (v) cause, or give any person
grounds to cause, the maturity of any debt, liability or obligation of In2itive
to be accelerated or increase any such liability or obligation.
5.7 Financial Statements; Accounts Receivable. The Key
Shareholders have caused In2itive to previously deliver to SPSS for inspection,
within a reasonable time prior to the Closing Date, true and correct copies of
the audited balance sheets of In2itive as of December 31, 1995 and December 31,
1996 and the related audited statements of income, statements of retained
earnings and statements of changes in financial position for the periods ending
on such dates (collectively, the "Financial Statements"). The Financial
Statements (i) have been prepared in accordance with Danish Annual Accounts Act
and the supplementing guidelines of the Danish Institute of State Authorized
Public Accountants, (ii) are correct and complete and are in accordance with the
books and records of In2itive, in all material respects and (iii) present fairly
in all material respects the financial position and condition of In2itive and
the related results of operations as at the dates and for the periods then ended
(subject to customary year-end adjustments, which adjustments are not material
in kind or amount, it being understood that neither (ii) nor (iii) above shall
imply that the Financial Statements are intended to present financial position
and results of operations in conformity with generally accepted accounting
principles of the United States.
Subject to a reserve for bad debts shown on In2itive's latest
balance sheets included in the Financial Reports, all accounts and notes
receivable reflected on the balance sheets are, and all accounts and notes
receivable subsequently accruing to the Closing Date will be, (a) valid, genuine
and subsisting, (b) subject to no known defenses, set-offs or counterclaims and
(c) current and collectible.
5.8 Absence of Undisclosed Liabilities; Warranties in
Connection with Software Products. To the best of the Key Shareholders'
knowledge, after due inquiry of
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In2itive, and except as and to the extent reserved for in the Financial
Statements, the Financial Statements of In2itive reflect all material claims and
liabilities which should be or are required to be disclosed under the guidelines
of the Danish Institute of State Authorized Public Accountants and the Danish
Annual Accounts Acts other than those in the ordinary course of business since
December 31, 1996, which have not yet been accrued or booked. The Key
Shareholders have made due inquiry with the management of In2itive and do not
know of any basis for the assertion of any claim or liability relating to the
businesses of In2itive, nor are they aware of any occurrence or fact that has or
might have an adverse effect on the businesses of In2itive. Except as listed on
Schedule 5.8, as of the date of this Agreement, In2itive has no material
outstanding debt to any bank or other lender. For the purposes of this
paragraph, materiality shall mean any liability or debt in excess of $5,000.
5.9 Absence of Certain Changes or Events. To the best of the
Key Shareholders' knowledge, after due inquiry of In2itive, since September 30,
1997 and other than listed on Schedule 5.9, there has not been (a) any damage,
destruction or casualty loss to the properties or assets of In2itive (whether
covered by insurance or not) outside the ordinary course of business; (b) any
material adverse change in the business, assets, properties, operations,
prospects or financial condition of In2itive, or any fact or condition which
could cause such a change, other than any change, fact or condition related
solely to the transactions contemplated hereby; (c) any entry into any
transaction, commitment or agreement (including, without limitation, any
borrowing) in excess of $5,000 or outside the ordinary course of business of
In2itive; (d) any direct or indirect redemption, repurchase or other acquisition
for value by In2itive of its capital stock or any agreement to take such action,
or any declaration, setting aside or payment of any dividend or other
distribution in cash, stock or property with respect to In2itive's capital
stock; (e) other than increases in base compensation and bonuses in the ordinary
course of business (not exceeding 10% per annum of the aggregate payroll), any
increase in the rate or terms of compensation payable or to become payable by
In2itive to its respective directors, managers, employees, agents or independent
contractors or any increase in the rate or change in the terms of any employment
agreement or compensatory arrangement, or any changes in any bonus, severance,
pension, insurance or other employee benefit plan, or any other payment or
benefit made to or for any such director, manager, employee, agent or
independent contractor; (f) any sale, transfer or other disposition of any asset
of In2itive to any party, including, without limitation, the Shareholders,
except for payment of obligations incurred, and sale of products, in the
ordinary course of business consistent with past practices; (g) any amendment or
termination of any material contract or agreement to which In2itive is a party
or any termination or waiver of any other rights of value to the businesses of
In2itive, except in the ordinary course of business; (h) any capital expenditure
for additions to property or equipment by In2itive in excess of $5,000; (i) any
split, combination, exchange or reclassification of shares of capital stock of
In2itive; (j) any issuance of capital stock of In2itive or of securities
convertible into or rights to acquire any such capital stock; (k) any failure by
In2itive to pay accounts payable or other obligations in the ordinary course of
business; (l) the incurrence of any obligations or liability (absolute or
contingent) or the making of any capital expenditure not in the ordinary course
of business or in excess of $5,000; (m) any pledge of any of the assets or
properties of In2itive or any action or inaction which would subject any such
assets or properties to any lien, security interest,
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mortgage, pledge, claim, charge or other encumbrance of any kind; (n) the
incurrence of any liability or obligation by In2itive, except for liabilities
incurred in the ordinary course of business; (o) any actual or threatened
termination or cancellation of, or modification or change in, any business
relationship with any customer or customers of In2itive or other agreement or
arrangement involving or related to the assets or properties of the businesses
of In2itive ; (p) any cancellation of a debt due to or a claim of In2itive,
other than by payment or other satisfaction; (q) any failure of In2itive to
perform under, or any default by In2itive under, any agreement, obligation or
covenant to which it is or was bound; (r) any change in any method of accounting
or accounting practice, principle or procedure; (s) any action or inaction which
might cause In2itive to incur any tax liability out of the ordinary course of
business; (t) any other event or condition of any character which materially and
adversely affects the businesses of In2itive; or (u) any agreement, whether in
writing or otherwise, to take any action described in this Section 5.9.
5.10 Investment in the SPSS Common Stock.
(a) SPSS has provided to each of the Shareholders listed on
Exhibit B (the "Non-English Shareholders") and each of the Non-English
Shareholders acknowledge receipt of a copy of, the Confidential Private
Placement Memorandum, dated October 23, 1997, together with the materials
provided therewith, and each of the Shareholders further acknowledge that (i)
each has been afforded such other information as each has deemed necessary to
make an informed decision to acquire the SPSS Common Stock to be received by the
Shareholders pursuant to this Agreement and have had sufficient opportunity to
ask questions and receive answers of In2itive and SPSS, as appropriate,
concerning the operations, business and financial condition of SPSS and
regarding the Acquisition and the business of SPSS and In2itive, and all such
questions have been answered, (ii) each has been informed of the provisions of
Article IV of this Agreement, (iii) each has been informed that the shares of
SPSS Common Stock each is acquiring must be held by such Shareholder
indefinitely, unless an effective 1933 Act registration statement or exemption
from registration is available; (iv) each has been informed of the provisions of
Rule 144 and Rule 144A promulgated under the 1933 Act, which rules permit
limited resale of restricted securities subject to the satisfaction of certain
conditions; (v) each has been informed that restrictions upon the sale of SPSS
Common Stock imposed by Federal and State securities, blue sky and other similar
laws may markedly affect the ability of the Shareholders to liquidate their
investment in the SPSS Common Stock to be received by the Shareholders pursuant
to this Agreement; (vi) each has been informed that the Shareholders have no
recourse against SPSS for declines in the value of their investment in the SPSS
Common Stock to be received by the Shareholders pursuant to this Agreement
absent fraud or violations of the Federal and State securities, blue sky and
other similar laws on the part of SPSS; and (vii) each has been informed that
the SPSS Common Stock to be received by the Shareholders pursuant to this
Agreement represents an investment in the business of SPSS, and that SPSS has
made no representations or warranties with respect to the future business
performance of SPSS or the price of the SPSS Common Stock.
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5.11 Real and Personal Property; Inventories. Schedule 5.11(a)
correctly identifies all real property owned or used by In2itive and each
material lease of real property held by In2itive. No claims, charges or notice
of violations have been filed, served, made or threatened, orally or in writing,
against or relating to any such property or any of the operations conducted at
any property leased by In2itive. In2itive owns no real property. Schedule
5.11(b) describes all material tangible or intangible personal property and
assets of In2itive with an estimated value greater than $5,000. The tangible
personal property and assets are generally in good working order or condition,
reasonable wear and tear excepted. In2itive has good and marketable title to,
and is in possession of or has control over, all of its personal property, none
of which is held under or subject to any mortgage, pledge, lien, lease,
encumbrance, conditional sales contract or other security arrangement ("Liens")
except for Taxes (as defined below) not yet due (such Liens for Taxes and the
amounts, if known, listed on Schedule 5.11(b)) and such other matters as are
reflected on Schedule 5.11(b).
5.12 Patents, Trademarks, Etc.
Schedule 5.12(a) contains an accurate and complete description
of all domestic and foreign patents, trademarks, current service marks,
trademark registrations, logos, trade names, assumed names, copyrights and
copyright registrations and all pending applications therefor other than those
assets relating to readily available commercial products or software
(collectively, the "Intellectual Assets"), presently owned or held by In2itive
or under which In2itive owns or holds any license, or in which In2itive owns or
holds any direct or indirect interest; and to the Key Shareholders' knowledge,
no others are necessary for the conduct of the present businesses of In2itive.
To the best of the Key Shareholders' knowledge, and other than readily available
commercial products or software, or as described on Schedule 5.12(b), none of
the products manufactured, distributed or sold by In2itive, nor any of the
Intellectual Assets, or intellectual property, including without limitation,
technology, inventions, processes, designs, formulae, know-how, trade secrets,
(collectively, with the Intellectual Assets, the "Intellectual Property"), or
any of In2itive's activities, conflict with, infringe or otherwise violate any
patents, trademarks or copyrights, or any other rights, of any individual or
entity, nor require payments to be made to any person. To the best of the Key
Shareholder's knowledge, information and belief, In2itive has the sole and
exclusive rights to the Intellectual Property and has the right and power to
use, lease and sell the Intellectual Property. To the best of the Key
Shareholder's knowledge, information and belief, no claim or potential claim has
been asserted by any other party to the Intellectual assets and there exists no
basis for such a claim or potential claim. To the best of the Key Shareholders'
and In2itive's knowledge, In2itive is not using confidential information or
trade secrets of any former employer of any past or present employees engaged in
businesses of In2itive. To the best of the Key Shareholder's knowledge,
information and belief, the items described in the schedules attached hereto and
the other Intellectual Property are reasonably adequate to conduct the
businesses of In2itive as presently conducted. Upon consummation of the
transactions contemplated hereby, SPSS will acquire good and marketable title to
all of the Intellectual Property and the goodwill associated therewith.
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Solely for purposes of this Section 5.12, "knowledge" shall mean actual
knowledge and that information resulting from a due inquiry by the Key
Shareholders of all present employees and independent contractors of In2itive
and such past employees and independent contractors of In2itive as deemed
appropriate and as reflected in the letters from such persons attached hereto.
5.13 Employees. All personnel, including employees, agents,
consultants and contractors, who have contributed to or participated in, in a
material way, the conception and development of the Intellectual Assets on
behalf of In2itive either (a) were at such time parties to "work-for-hire"
arrangements or similar agreements with In2itive, that has accorded In2itive
full, effective, exclusive and original ownership of all intellectual property
thereby arising, or (b) except as disclosed on Schedule 5.13(b), have executed
appropriate instruments of assignment, which are still in full force and effect,
in favor of In2itive, as assignee, that have conveyed to In2itive full,
effective and exclusive ownership of all intellectual property thereby arising.
To the best of the Key Shareholders' knowledge, no employee of In2itive is in
violation of (i) any term of any employment contract, any "work for hire"
arrangement or similar agreement, or any patent disclosure agreement or (ii) any
other contract or agreement, or any restrictive covenant relating to the rights
of any such employee to be employed by In2itive or to use trade secrets or
proprietary information of others.
5.14 Contracts and Commitments.
(a) Schedule 5.14 contains a list of all enforceable
agreements, contracts, guarantees, commitments, restrictions or
instruments of any kind of In2itive, including without limitation (i)
powers of attorney (whether revocable or irrevocable) to any individual
or entity, (ii) Intellectual Property licenses, including, without
limitation, licenses with respect to source codes used or to be used in
either the Software Products, and any agreements by which In2itive has
an obligation to pay royalties to any third party in connection
therewith, (iii) contracts, agreements, licenses or other commitments
or arrangements in effect with respect to the development, marketing,
distribution, licensing, or promotion of the Software Products or any
other inventory, the Technical Documentation, or In2itive's
Intellectual Assets with any independent salesperson, distributor,
sublicensor, or other remarketer or sales organization, (iv) grants to
any individual or entity of any rights or security interests with
respect to the source codes for the Software Products, and (v)
insurance policies held by In2itive concerning its businesses,
operations and properties ("Contracts"). True and correct copies of all
Contracts have been made available to SPSS at a reasonable time prior
to Closing. To the best of the Key Shareholders' knowledge, after due
inquiry of In2itive, all of the Contracts are valid and binding
obligations of In2itive enforceable in accordance with their respective
terms to the extent permitted by applicable law, and are in full force
and effect and complied with. To the best of the Key Shareholders'
knowledge, all of the Contracts are legal and binding obligations of
the other party, enforceable in accordance with their respective terms
to the extent permitted by applicable law. All of the Contracts are in
full force and effect and complied with, and to the best of In2itive's
knowledge, none of the Contracts have a Material Adverse Effect on
In2itive. All of In2itive's
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standard form customer contracts constitute only end-user agreements,
each of which grants the end-user thereunder solely the non-exclusive
right and license to use an identified Software Product of In2itive and
related user documentation, for internal purposes only. True and
correct copies of each standard form customer and distributor contracts
currently in use by In2itive in the conduct of its businesses are
attached to Schedule 5.14. In2itive has not agreed with any customer or
distributor to make any variation in any such contract which could have
a Material Adverse Effect on In2itive.
(b) To the best of the Key Shareholders' knowledge and except
as disclosed on Schedule 5.14(b), In2itive is not in default, and there
is no basis for any valid claim of default, in any respect under any of
the Contracts. To the best of the Key Shareholders' knowledge, no other
party to any of the Contracts is in default or breach thereof.
5.15 Source Code. Except as listed on Schedule 5.15, In2itive
owns all rights, title and interest in and to the source codes for all of its
software products and has not distributed any copies of such source codes to any
third parties, and In2itive has not agreed to pay to any individual or entity
any royalty, commission or other amount on account of sales of its software
products.
5.16 Government Contracts. Except as described on Schedule
5.16, the Key Shareholders do not have knowledge of any acts, omissions or
noncompliance with regard to any applicable public contracting statute,
regulation or contract requirement (whether express or incorporated by
reference) to any contracts relating to In2itive, its businesses or any of its
assets with any Government Contract Party (as defined below) in either case that
have led to or could lead to (a) any claim, refusal or dispute involving
In2itive, its businesses, or any of its assets and any Government Contract Party
or (b) any suspension, debarment or contract termination, or proceeding related
thereto. In2itive does not have any contracts with any Government Contract Party
(as defined below) other than standard end-user license agreements containing
appropriate reservations of rights. All of In2itive's development of technical
data and Software Products were developed exclusively at private expense. For
purposes of this Section the term "Government Contract Party" means any
independent or executive agency, division, subdivision, audit group or procuring
office of any government, including any prime contractor of any government and
any higher level subcontractor of a prime contractor of any government, and
including any employees or agents thereof, in each case acting in such capacity.
5.17 Insurance. Schedule 5.17 hereto is a description of all
insurance policies held by In2itive. Each of In2itive's insurance policies is in
full force and effect, and the premiums with respect thereto are fully paid
through the dates indicated thereon. No insurer has denied coverage or reserved
rights for any claim made by In2itive, or any other individual or entity under
any insurance policies.
5.18 Litigation and Administrative Proceedings. Except as
described in detail on Schedule 5.18, there is no claim, action, suit,
proceeding or investigation in any court or
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before any governmental or regulatory authority pending, or to the best of the
Key Shareholders' knowledge otherwise threatened, against or adversely affecting
In2itive or which seeks to enjoin or obtain damages in respect of the
transactions contemplated hereby. The Key Shareholders do not know nor have any
reason to know of any basis for any such claim, action, suit, proceeding or
investigation.
5.19 Tax Matters. For purposes of this Agreement:
(i) The term "Taxes" means all state and local taxes
imposed by any Danish or foreign law, and other net
income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other
taxes, fees, assessments, or charges of any kind
whatever including stamp duty and VAT together with any
interest and any penalties, additions to tax, or
additional amounts with respect thereto, and the term
"Tax" means any one of the foregoing Taxes;
(ii) The term "Returns" means all returns, declarations,
reports, statements, and other documents required to be
filed in respect of Taxes, and the term "Return" means
any one of the foregoing Returns;
5.19.1 All Returns Filed. All Returns
required to be filed by or on behalf of In2itive on or before the Effective Date
has been filed and such Returns are complete and accurate and to the best
knowledge of the Key Shareholders, after due inquiry of In2itive, disclose all
Taxes (and other charges) required to be paid for the periods covered thereby.
No extension of time in which to file any such Returns is currently in effect
and there are not outstanding agreements or waivers extending the statutory
period of limitation applicable to such Returns.
5.19.2 All Taxes Paid. All Taxes (and
other charges) shown on such Returns or otherwise required to be paid, and any
deficiency assessments, penalties, interest and other charges with respect
thereto, have been paid, and there is otherwise no current liability for any
unpaid taxes (or other charges) due in connection with such Returns or
otherwise. There are no tax liens (other than for taxes not yet due) on any of
the assets or properties of In2itive and, no basis exists for the imposition of
any such liens.
5.19.3 Examinations, Etc. To the best
knowledge of the Key Shareholders, after due inquiry of In2itive, no state,
local, foreign or other Returns of In2itive for tax years that remain open under
any applicable statute of limitations have been examined by the tax authorities
and no deficiencies have been asserted or assessments made as a result of
examinations (including all penalties and interest). No issues have been raised
by (or are
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currently pending before) any taxing authority in connection with any of the
Returns which could reasonably be expected to have a Material Adverse Effect on
In2itive, if decided adversely to In2itive, nor are there any such issues which
have not been so raised but, if so raised by any taxing authority in connection
with any of the Returns could, in the aggregate, reasonably be expected to have
a Material Adverse Effect on In2itive.
5.19.4 Withholding. In2itive has withheld
from its employees and others (and timely remitted to the appropriate taxing
authorities) proper and accurate amounts for all periods in compliance with all
tax withholding provisions of applicable state, foreign, local and other laws
(including, without limitation, income, withholding, social security, employment
and other payroll taxes).
5.19.5 Prior Consolidated Groups. In2itive
is not, and has never been, subject to joint taxation with any other company.
5.19.6 Unpaid Tax. To the best knowledge
of the Key Shareholders, after due inquiry of In2itive, In2itive's unpaid taxes
do not exceed the reserve for tax liability (excluding any reserve for deferred
taxes established to reflect timing differences between book and tax income) set
forth or included in the most recent balance sheet included in the Financial
Statements, as adjusted for the passage of time through the Effective Date, in
accordance with its past custom and practice.
5.20 Compliance with Laws. To the best knowledge of the Key
Shareholders, after due inquiry to In2itive, In2itive has not in the past been
nor is presently in any material violation of, in respect of operations, real
property, machinery, equipment, all other property, practices and all other
aspects of its businesses, any applicable law (whether statutory or otherwise),
rule, regulation, order, ordinance, judgment or decree of any governmental
authority (federal, state, local, foreign or otherwise) (collectively, "Laws").
In2itive has not received any written notice of any asserted present or past
failure of In2itive to comply with any of such Laws. For purposes of this
paragraph, materiality shall mean any violation which could result in expenses
or fines to In2itive greater than $5,000.
5.21 Environmental and Safety Matters. To the best knowledge
of the Key Shareholders, after due inquiry of In2itive, In2itive has complied in
all material respects with all state, local or foreign Laws, regulations or
ordinances relating to environmental matters ("Environmental Laws") including,
but not limited to: air pollution; water pollution; noise control; on-site or
off-site solid or hazardous waste storage, treatment, discharge, disposal or
recovery; toxic and hazardous chemical reporting; or employee safety and
hazardous material use, generation, reliance, transportation, and reporting
provisions. No written notice of violation of or potential liability resulting
from any such Environmental Laws, or orders with respect thereto, has been
received, nor is any such notice pending or to the best of its knowledge
threatened. For purpose of this paragraph materiality shall mean any violation
which could result in a liability or penalty of greater than $5,000.
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5.22 Employee Benefits.
5.22.1 Schedule 5.22 contains a written
list of all employee benefit plans relating to employee benefits with
respect to which In2itive has incurred or may incur any future or
contingent obligations, including, without limitation, all plans,
agreements or arrangements relating to deferred compensation,
pensions, profit sharing, retirement income or other benefits, stock
purchase, stock ownership and stock option plans, stock appreciation
rights, bonuses, severance arrangements, health and welfare benefits,
insurance benefits and all other employee benefits or fringe benefits
(collectively referred to as the "Plans").
5.22.2 Except as disclosed on Schedule
5.22 each Plan (and each trust forming a part of such Plan) has been
administered and operated in all respects in accordance with its terms
and applicable law.
5.22.3 Except as disclosed on Schedule 5.22
no pension promises have been issued which are not fully funded in or
with banks, pension funds or insurance companies in accordance with
Danish law and all due premiums have been made or duly reserved for.
5.22.4 Other than for claims in the
ordinary course of business for benefits under the Plans, and except
as disclosed on Schedule 5.22 there are no actions, suits, claims or
proceedings, pending or threatened, nor to the best knowledge of
In2itive does there exist any basis therefor, which may result in any
liability with respect to any Plan to In2itive, or any Plan or trust
thereof.
5.23 Licenses and Permits. In2itive has all material
governmental licenses and permits and other material governmental authorizations
and approvals required for the conduct of its businesses as presently conducted.
5.24 Relations With Suppliers and Customers. Neither In2itive
nor the Shareholders is required to provide any bonding or other financial
security arrangements in connection with any transaction with any customer or
supplier. Neither In2itive nor the Shareholders has received any notice that any
customer or supplier of In2itive will cease to do business with In2itive or
refuse to do business with SPSS, or In2itive after the consummation of the
transactions contemplated hereby.
5.25 Interests in Competitors, Suppliers and Customers. Except
as set forth in Schedule 5.25, none of the Shareholders nor any manager or
director of In2itive or any entity controlled by or under common control with
In2itive has a greater than five percent (5%) ownership interest in any
competitor, supplier or customer of In2itive or any property used in the
operation of its businesses.
5.26 Employment Matters. Schedule 5.26 contains a list
of all oral and written employment or consulting contracts or other agreements
or arrangements to which In2itive is a party or by which it is bound, and all
these contracts and arrangements are in full force and
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effect. Except as disclosed on Schedule 5.26, there are no other oral contracts
or arrangements of the type described in the preceding sentence. There have been
no claims of defaults and there are no facts or conditions which if continued,
or with the giving of notice, will result in a default under these contracts or
arrangements.
5.27 Related Transactions. In2itive has not made or entered
into any loan, contract, lease, commitment, arrangement or understanding with
any of its directors, managers, employees, shareholders or any entity controlled
by or under common control with In2itive, except normal compensation
arrangements with managers, all of which are reasonable in amount and terminable
by In2itive on 30 days' notice.
5.28 Brokers and Finders. Neither In2itive nor the
Shareholders (nor any of their respective managers, directors, employees,
affiliates, associates, or family members), has employed any broker, finder or
investment banker, or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with this Agreement or the transactions
contemplated hereby.
5.29 Questionable Payments. Neither In2itive nor the
Shareholders, nor any director, manager, agent, employee or other person
associated with or acting on behalf of In2itive has directly or indirectly: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) made any unlawful
payment to government officials or employees or to political parties or
campaigns from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (d) intentionally made any
false or fictitious entry on the books or records of In2itive; (e) made any
bribe, payoff, influence payment, kickback or other unlawful payment; or (f)
made any bribe or other payment of a similar or comparable nature to any person
or entity, private or public, regardless of form, to obtain favorable treatment
in securing business or to obtain special concessions or treatment.
5.30 Books and Records. The books and records of In2itive have
been maintained in accordance with Danish bookkeeping regulations and
commercially reasonable business and bookkeeping practices and accurately
reflect in all material respects the business, assets, properties, rights,
obligations, liabilities and operations of In2itive.
5.31 Bank Accounts; Safe Deposit Boxes. Included on Schedule
5.31 are the names and locations of all banks in which In2itive has accounts or
safe deposit boxes and the names of all persons authorized to draw thereon or to
have access thereto.
5.32 Full Disclosure. In2itive and the Key Shareholders have
disclosed to SPSS all facts material to the business, operations, assets or
condition (financial or otherwise) of In2itive. To the best knowledge of the Key
Shareholders, no representation or warranty by the Shareholders in this
Agreement, any of the Schedules attached hereto or any other documents,
exhibits, certificates or schedules furnished to SPSS pursuant hereto, contains,
or as of the Closing Date will contain, any untrue statement of a material fact,
or omits, or as of the Closing
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Date will omit, to state any material fact necessary to make the statements or
facts contained therein not misleading. The copies of all documents furnished to
SPSS hereunder are true and complete copies of the originals thereof in all
material respects.
5.33 Effect of Certificates. All representations and
warranties made in certificates of In2itive and the managers of In2itive or the
Key Shareholders, or any of the foregoing, delivered hereunder shall be deemed
to be additional representations and warranties of the Shareholders.
5.34 Accounting Matters. Neither In2itive nor the
Shareholders has taken or agreed to take any action that would prevent SPSS from
accounting for the business transaction to be effected by the Acquisition as a
pooling of interests.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SPSS
SPSS represents and warrants to In2itive as follows:
6.1 Organization and Qualification. SPSS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby.
6.2 Authority. SPSS has full power, capacity and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by SPSS, and no other corporate proceedings on the part of SPSS are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by SPSS and constitute legal, valid and binding agreements of SPSS,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought, and (iii) enforceability of Section 4.5 of this
Agreement may be subject to limitations of public policy under and State
securities laws.
6.3 Consents and Approvals. There is no authorization,
consent, order or approval of, or notice to or filing with, any individual or
entity required to be obtained or given in order for SPSS to consummate the
transactions contemplated hereby and fully perform their obligations hereunder.
SPSS has received a form of the pooling letter referred to in Section 12.8
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herein, and has no reason to believe that a final letter from KPMG Peat Marwick
LLP will not be delivered as required under Section 12.7.
6.4 Absence of Conflicts. The execution, delivery and
performance by SPSS of this Agreement (including, without limitation, the
offering, issuance and sale of the SPSS Common Stock in the Acquisition) and the
consummation by SPSS of the transactions contemplated hereby will not, with or
without the giving of notice or the lapse of time, or both, (i) conflict with or
result in a breach or default under any term or condition of the Articles of
Incorporation or By-laws of SPSS, (ii) violate any provision of law, statute,
rule or regulation to which SPSS is or was subject, (iii) violate any order,
judgment or decree which is or was applicable to SPSS or (iv) conflict with, or
result in a breach or default under, any term or condition of the Certificates
of Incorporation or By-Laws of SPSS or any agreement or other instrument to
which either of them is a party or by which either of them is bound, or (v)
cause, or give any person grounds to cause the maturity of any debt, liability
or obligation of SPSS to be accelerated or increase any such liability or
obligation.
6.5 Capitalization. The authorized capital stock of SPSS
consists solely of 50,000,000 shares of SPSS Common Stock, of which, as of
September 30, 1997, approximately 8,637,440 shares were issued and outstanding.
All the issued and outstanding shares of SPSS Common Stock are validly issued,
fully paid and nonassessable. There are no options, warrants or other rights,
agreements or commitments obligating of SPSS to issue shares of its capital
stock except for stock options to purchase approximately 1,807,482 shares of
SPSS Common Stock pursuant to various SPSS option plans and agreements and
employee rights to purchase SPSS Common Stock pursuant to SPSS' employee stock
purchase plans.
6.6 Reports and Financial Statement. SPSS has previously
furnished In2itive with true and complete copies of its (i) Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 as filed with the SEC,
(ii) its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997, as filed with the SEC and (iii) its report on Form 8-K to
reflect the acquisition of Quantime Limited filed October 15, 1997 as filed with
SEC (collectively the "SPSS Reports"). The audited and unaudited consolidated
financial statements of SPSS (the "SPSS Financial Statements") included or
incorporated by reference into such SPSS Reports have been prepared in
accordance with generally accepted accounting principles applied in a consistent
basis (except as may be indicated therein or in the notes thereto) and fairly
present the financial position of SPSS and its consolidated subsidiaries, as of
the dates thereof, and the results of their operations and cash flows for the
periods then ended subject, in the case of the unaudited financial statements,
to normal year-end adjustments which are not materially adverse. The SPSS
Reports required to be filed by SPSS under the Exchange Act since December 31,
1996 and its 1997 proxy statement have been filed by SPSS in a timely manner, to
the best of SPSS's knowledge, were complete and correct in all material
respects, as of the dates at which the information was furnished, and, to the
best of SPSS's knowledge, contained no untrue statement of a material fact, nor
omitted to state a material fact or disclose any liability required to be
included therein or necessary in light of the circumstances under which it was
made in order to make the statements made therein not misleading.
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6.7 Litigation and Administrative Proceedings. There is no
claim, action, suit, proceeding or investigation in any court or before any
governmental or regulatory authority pending or threatened against or affecting
SPSS which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby.
6.8 Brokers and Finders. SPSS has not employed any broker,
finder or investment banker, or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with this Agreement or the
transactions contemplated by this Agreement.
6.9 SPSS Common Stock. The SPSS Common Stock to be issued in
the Acquisition, when delivered in accordance with this Agreement, shall be duly
authorized, validly issued, fully paid and nonassessable.
6.10 Effect of Certificates. All representations and
warranties made in certificates of SPSS and the officers of SPSS, or any of the
foregoing, delivered hereunder shall be deemed to be additional representations
and warranties of SPSS.
6.11 Pooling of Interests Accounting. SPSS has consulted with
KPMG Peat Marwick LLP as its independent auditors, regarding the ability to
qualify for pooling of interests accounting relating to the transactions
contemplated hereunder. Such auditors have not stated to SPSS any material doubt
that pooling of interests accounting will be available with respect to the
transactions contemplated hereunder. Based on its discussions with KPMG Peat
Marwick LLP, and assuming the accuracy of the information in the Schedules
attached hereto and the other information disclosed in connection with the
transactions contemplated by this Agreement, SPSS believes that the condition
precedent contained in Section 12.8 hereof will be satisfied.
6.12 Dividends and Distributions. From December 31, 1996 to
the date hereof, SPSS has not declared or paid any dividends on any shares of
its capital stock nor has it made any other payments or distributions to its
stockholders.
6.13 Marketable Title. SPSS owns and has good and marketable
title to the SPSS Common Stock, free and clear of any lien, pledge, claim,
encumbrance, restriction or right of any third party of any kind. On the Closing
Date, the Stockholders will acquire good and marketable title to the SPSS Common
Stock, free and clear of the aforesaid, including without limitation, any of the
foregoing set forth in the Bylaws of SPSS.
6.14 Reliance on Responses. SPSS, its agents, counsellors and
other representatives have had an opportunity to interrogate In2itive, the
management of In2itive and the auditor of In2itive about In2itive, its accounts,
its activities, its management, its personnel and employment agreements, its
lease contracts and all other material third party contracts, its supply and
distribution contracts, its insurance coverage, its intangible rights and all
other contract rights and obligations related to or referred to in this
Agreement and the attached schedules. SPSS has relied on the accuracy of all of
the responses given it by In2itive, its management, and its auditor
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in connection with the transactions contemplated by this Agreement and all such
questions have been satisfactorily answered.
ARTICLE VII
COVENANTS RELATING TO CONDUCT OF BUSINESS
7.1 Conduct of Business
(a) Conduct of Business by In2itive. During the period from
the date of this Agreement to the Closing Date of the Acquisition Agreement, the
Shareholders shall ensure that In2itive shall carry on its business in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent therewith, use all reasonable
efforts to preserve intact its current business organizations, keep available
the services of its current managers and employees, preserve its relationships
with customers, suppliers, licensor, licensees, distributors and others having
business dealings with it to the end that its goodwill and ongoing businesses
shall be unimpaired at the Closing Date of the Acquisition Agreement. Without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Closing Date of the Acquisition Agreement, In2itive shall
not:
(i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock;
(ii) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or purchase, redeem or
otherwise acquire any shares of capital stock of In2itive or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities;
(iii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants, or options to acquire, any such
shares, voting securities or convertible securities;
(iv) other than as disclosed elsewhere in this Agreement,
amend its Articles of Incorporation, By-laws or other comparable charter or
organizational documents;
(v) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof or (B)
any assets that individual or in the aggregate are material to In2itive, except
purchases of inventory in the ordinary course of business consistent with past
practice;
(vi) sell, lease, license, mortgage or otherwise encumber
or subject to any lien or otherwise dispose of any of its properties or assets;
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(vii) (A) incur any indebtedness, except for short term
borrowings incurred in the ordinary course of business consistent with past
practice, or (B) make any loans, advances or capital contributions to, or
investments in, any other person;
(viii) make or agree to make any equipment leases or any new
capital expenditure or capital expenditures which are individually in excess of
$5,000 or in the aggregate are in excess of $10,000;
(ix) make any tax election that could reasonably be expected
to have a material adverse effect or settle or compromise any income tax
liability;
(x) pay, discharge, settle or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated by, the
most recent Financial Statements or incurred since the date of such financial
statements in the ordinary course of business consistent with past practice;
(xi) except in the ordinary course of business, modify, amend
or terminate any material contract or agreement to which In2itive is a party or
waive, release or assign any material rights or claims thereunder;
(xii) take any action that (without giving effect to any
action taken or agreed to be taken by SPSS or any of its affiliates) would
prevent SPSS from accounting for the business combination to be effected by the
Acquisition as a pooling of interests or from treating the Acquisition as a
"reorganization" under Section 368(a) of the Code; or
(xiii) take any action to institute any new severance or
termination pay practices with respect to any directors, managers or employees
of In2itive or to increase the benefits payable under its severance or
termination pay practices in effect on the date hereof; and
(xiv) (except for salary increases in the ordinary course of
business and consistent with past practice) adopt or amend, in any material
respect, except as may be required by applicable law or regulation, any
collective bargaining, bonus, profit sharing, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment or
other employee benefit plan, agreement, trust, fund, plan or arrangement for the
benefit or welfare of any directors, managers or employees.
(xv) authorize any of, or commit or agree to take any of, the
foregoing actions;
(b) Negotiations with Others. Neither the Shareholders nor
In2itive shall, directly or indirectly, through any manager, director, employee,
representative or agent thereof, solicit or encourage (including by way of
furnishing nonpublic information) or take other action
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to facilitate any inquiries or the making of any proposal that constitutes or
may reasonably be expected to lead to an Business Combination Proposal (as
defined below) from any person, or engage in any discussions or negotiations
relating thereto or in furtherance thereof or accept any acquisition proposal.
For the purposes of this Agreement "Business Combination Proposal" means
inquiries or proposals regarding (i) any merger, consolidation, sale of
substantial assets or similar transactions involving In2itive, (ii) sale of 10%
or more of the outstanding shares of capital stock of In2itive or similar
transactions involving In2itive, or (iii) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in any
of the foregoing. In2itive and the Shareholders shall immediately cease and
cause to be terminated any existing discussions or negotiations with any parties
conducted prior to the date of this Agreement with respect to any of the
foregoing.
(c) Notification of Certain Matters. The Shareholders shall
give prompt notice to SPSS and SPSS shall give prompt notice to the Shareholders
of: (i) the occurrence or failure to occur, of any event which such party
believes would be likely to cause any of its representations or warranties
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Closing Date and (ii) any failure of the Shareholders on the one
hand or SPSS on the other hand, as the case may be, or of any officer, manager,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that failure to give such notice shall not constitute a
waiver of any defense that may be validly asserted.
(d) Pooling Accounting. The Shareholders and SPSS hereby agree
(i) not to take any action, based on information or advice provided by KPMG Peat
Marwick LLP, that would adversely affect the ability of SPSS to treat the
Acquisition as a pooling of interests, and (ii) to take such action as may be
reasonably required to negate the impact of any past actions which, based on
information or advice provided by KPMG Peat Marwick LLP, would adversely affect
the ability of SPSS to treat the Acquisition as a pooling of interests in
accordance with generally accepted accounting principles consistently applied
and all published rules, regulations and policies of the SEC.
ARTICLE VIII
COVENANTS OF THE SHAREHOLDERS
The Shareholders covenant as follows:
8.1 Consents and Approvals. The Shareholders agree to use all
reasonable efforts to make all registrations, filings and applications, and give
all notices and obtain all governmental and other consents, approvals, orders,
qualifications and waivers necessary for the consummation of the transactions
contemplated by, or the performance by In2itive and the Shareholders of any of
their obligations under, this Agreement, or which may become reasonably
necessary or desirable in connection with any of the foregoing, in each case
upon terms and conditions reasonably satisfactory to SPSS and its counsel.
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8.2 Tax Returns. SPSS will cooperate with the Shareholders to
file, or cause to be prepared and filed, on a timely basis all income tax
returns of In2itive due after the Closing Date and attributable to periods
ending on or before the Closing Date (the "Returns"). SPSS shall direct the
preparation and filing of the Returns; provided, however, that the Shareholders
shall be responsible for paying any Taxes to the extent of the indemnity
therefor.
8.3 Access to Information.
(a) From the signing of this Agreement to the Closing Date,
the Shareholders shall allow SPSS to have complete access at all reasonable
times to In2itive's managers, employees, agents, properties, books and records,
and shall furnish SPSS all financial, operating and other data and information
as SPSS including, but not limited to such information as may be reasonably
requested from time to time concerning the underlying tax basis of each
shareholders stock of In2itive, through its officers, employees or agents, may
reasonably request.
(b) No investigation pursuant to this Section 8.3 shall
affect, add to or subtract from any representations or warranties or the
conditions to the obligations of the parties hereto to effect the Acquisition.
8.4 Affiliates and Certain Stockholders. Prior to the Closing
Date, the Shareholders shall cause In2itive to deliver to SPSS a letter
identifying all persons who are "affiliates" of In2itive for purposes of
applicable interpretations regarding the pooling-of-interests method of
accounting (the "In2itive Affiliates"). The Shareholders shall cause each
In2itive Affiliate to deliver to SPSS on or prior to the Closing Date a written
agreement substantially in the form attached as Exhibit C hereto (the
"Affiliates Letter"). If the Acquisition would otherwise qualify for
pooling-of-interests accounting treatment, shares of SPSS Common Stock issued to
such affiliates of In2itive in exchange for Shares shall not be transferable
until such time as financial results covering at least thirty (30) days of
combined operations of SPSS and In2itive have been published within the meaning
of Section 201-01 of the SEC's Codification of Financial Reporting Policies,
regardless of whether each such affiliate has provided the written agreement
referred to in this Section 8.4, except to the extent permitted by, and in
accordance with, Accounting Series Release 135 and Staff Accounting Bulletins 65
and 76 (such date is hereinafter referred to as the "Earnings Release Date").
Any shares of SPSS Common Stock held by Affiliates shall not be transferable,
regardless of whether each such Affiliate has provided the written agreement
referred to in this Section 8.4, if such transfer, either alone or in the
aggregate with other transfers by Affiliates, would preclude SPSS's ability to
account for the business combination to be effected by the Acquisition as a
pooling of interests. The Shareholders shall ensure that In2itive shall not
register the transfer of any certificate representing capital stock of In2itive,
unless such transfer is made in compliance with the foregoing. Except as
provided in Article 4 hereof, SPSS shall not be required to maintain the
effectiveness of any registration statement under the 1933 Act for the purposes
of resale of the SPSS Common Stock by Affiliates.
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8.5 Further A surances. The Shareholders shall from time to
time, at the request of SPSS and without further cost or expense to SPSS,
execute and deliver such other documents and take such other actions as shall be
reasonably necessary or appropriate to consummate fully the transactions
contemplated hereby.
ARTICLE IX
COVENANTS OF SPSS
SPSS covenants as follows:
9.1 Retention of Records. After the Closing Date, SPSS will
retain all of In2itive's books and records in their possession in accordance
with the requirements of Danish law and SPSS's policies for retention of its own
books and records, and upon reasonable notice, for a reasonable purpose, during
SPSS's regular business hours and at reasonable intervals, will provide the
Shareholders, and their respective agents and representatives designated in
writing, access to such books and records, concerning periods prior to the
Closing Date.
9.2 Severance Packages. Within a reasonable time after
the Closing Date, SPSS shall provide reasonable severance packages, as it
determines in its sole discretion, to In2itive employees who are not retained
for employment with SPSS.
9.3 Further Assurances. SPSS shall from time to time, at the
request of the Shareholders and without further cost or expense to the
Shareholders, execute and deliver such other documents and take such other
actions as shall be reasonably necessary or appropriate to consummate fully the
transactions contemplated hereby.
9.4 Affiliates and Certain Stockholders. Prior to the Closing
Date, SPSS shall identify all persons who are "affiliates" of SPSS for purposes
of applicable interpretations regarding the pooling-of-interests method of
accounting (the "SPSS Affiliates"). SPSS shall cause each SPSS Affiliate to
deliver to SPSS on or prior to the Closing Date a written agreement
substantially in the form attached as Exhibit D hereto (the "SPSS Affiliate
Letter"). If the Acquisition would otherwise qualify for pooling-of-interests
accounting treatment, SPSS Affiliates shall not transfer any shares of SPSS
Stock until such time as financial results covering at least thirty (30) days of
combined operations of SPSS and In2itive have been published within the meaning
of Section 201-01 of the SEC's Codification of Financial Reporting Policies,
regardless of whether each such affiliate has provided the written agreement
referred to in this Section 9.4, except to the extent permitted by, and in
accordance with, Accounting Series Release 135 and Staff Accounting Bulletins 65
and 76 (such date is hereinafter referred to as the "Earnings Release Date").
Any shares of SPSS Common Stock held by SPSS Affiliates shall not be
transferable, regardless of whether each such SPSS Affiliate has provided the
written agreement referred to in this Section 9.4, if such transfer, either
alone or in the aggregate with other transfers by SPSS Affiliates, would
preclude SPSS's ability to account for the business
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combination to be effected by the Acquisition as a pooling of interests. SPSS
shall ensure that it shall not register the transfer of any certificate
representing capital stock of SPSS, unless such transfer is made in compliance
with the foregoing.
ARTICLE X
MUTUAL COVENANTS
Each of the parties hereto covenants as follows:
10.1 Confidentiality. Except as disclosed on Schedule 10.1 and
as otherwise required by law or judicial or administrative proceedings,
including proceedings between the parties with respect to the transactions
contemplated hereby, and then only to the extent specifically required by such
proceedings, and except for public announcements on the advice of counsel, each
of the parties agrees not to (i) disclose any Confidential Information (defined
hereinbelow) of any other party, or the terms of this Agreement, to any
individual or entity (other than its directors, officers, managers, employees,
agents and representatives with a need to know such Confidential Information in
order to consummate the transactions contemplated hereby and then only if
reasonable steps are taken with such parties to preserve the confidentiality
thereof) or (ii) use any Confidential Information for any purpose other than,
with respect to SPSS, operating the acquired business. "Confidential
Information" shall mean any secret or confidential information of the software
business, In2itive, SPSS, including, but not limited to, customer information,
financial information, technical information, details or information concerning
contracts, trade secrets, marketing information or any other data, information
or proprietary information of or relating to the software business, In2itive,
SPSS or any affiliate thereof, or their respective products or services. No
obligations shall exist under this Agreement with respect to Confidential
Information that (i) is publicly known at the time of the disclosure or becomes
publicly known through no wrongful act or failure of In2itive, the Shareholders,
SPSS, (ii) is disclosed by a third party which does not have a confidential
relationship with In2itive, the Shareholders, SPSS, and which was rightfully
acquired by third party, or (iii) is legally compelled to be disclosed pursuant
to a subpoena, summons, order or other judicial or governmental process,
provided that the parties hereto provide prompt notice of any such subpoena,
summons, order or other judicial or governmental process to such other parties
of the Confidential Information, so as to allow the parties an opportunity to
oppose such process.
10.2 Consistent Tax Reporting. The parties agree for tax
purposes to report the transactions contemplated by this Agreement, and to treat
any subsequent related transactions or items, in a manner consistent in all
respects with the terms and provisions of this Agreement. Each party shall
cooperate with the other parties as appropriate for all relevant tax purposes
relating to the transactions contemplated by this Agreement.
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10.3 Cooperation. The parties agree to cooperate for all other
reasonable purposes after the Closing, including with respect to any audit by
any taxing authority of any of the income tax or other tax returns of In2itive.
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Shareholders to consummate the transactions
contemplated hereby is subject to the satisfaction on or prior to the Closing
Date of the following conditions:
11.1 Representations and Warranties. The representations and
warranties of SPSS shall be true and accurate on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date.
11.2 Performance. SPSS shall have performed in all material
respects all covenants and agreements required by this Agreement to be performed
by them on or before the Closing Date.
11.3 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, transfers, consents, approvals, orders,
qualifications, waivers and other actions listed on Schedule 6.3 hereto or
otherwise required of any persons or governmental authorities or private
agencies in connection with the consummation of the transactions contemplated by
and the performance by SPSS of their respective obligations under this Agreement
shall have been made or obtained and all applicable waiting periods shall have
expired or been terminated.
11.4 No Litigation. No action, suit or proceeding shall have
been instituted by any person or entity, or threatened by any governmental
agency or body, before a court or governmental body, to restrain or prevent the
consummation of the transactions contemplated by, or the performance by SPSS of
its obligations under, this Agreement or which seeks other relief with respect
to any of such transactions or which could reasonably be expected to have a
materially adverse effect on the businesses, results of operations, assets,
financial condition or prospects of SPSS. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
governmental agency or body in effect which restrains or prohibits the
consummation of the transactions contemplated by this Agreement.
11.5 Pooling. In2itive shall have discussed with and received
approval from KPMG Peat Marwick LLP as to any action to be taken by or inaction
of In2itive of In2itive or the Shareholders between the date hereof and the
Closing Date which would or may prevent SPSS from accounting for the
transactions contemplated hereunder as a pooling of interests by SPSS for
purposes of its consolidated financial statements under generally accepted
accounting principles and applicable SEC rules and regulations. No action shall
have been taken by any
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government authority or any statute, rule, regulation or order, promulgated or
issued by any governmental authority, or any proposal made for any such action
by any governmental authority which is reasonably likely to be put into effect,
that would prevent SPSS from accounting for the transactions contemplated
hereunder as a pooling of interests.
11.6 Delivery. At the closing the documents referred in
Section 13.1(b) shall be delivered to the Shareholders.
11.7 Legal Opinion. The Shareholders shall have received
the written opinion dated the Closing Date of counsel to SPSS referenced in
Section 13.1(b).
ARTICLE XII
CONDITIONS TO OBLIGATIONS OF SPSS
The obligation of SPSS to consummate the transactions
contemplated hereby is subject to the satisfaction on or prior to the Closing
Date of the following conditions:
12.1 Representations and Warranties. The representations and
warranties of the Shareholders shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date.
12.2 Performance. The Shareholders shall have performed in all
material respects all covenants and agreements required by this Agreement to be
performed by it on or before the Closing Date.
12.3 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, transfers, consents, approvals, orders,
qualifications, waivers and other actions of any kind listed on the schedules
attached hereto or otherwise required of any persons or governmental authorities
or private agencies in connection with the consummation of the transactions
contemplated by, and the performance by the Shareholders of their respective
obligations under this Agreement shall have been made or obtained and all
applicable waiting periods shall have expired or been terminated, in each case
upon terms and conditions reasonably satisfactory to SPSS.
12.4 No Litigation. No action, suit or proceeding shall have
been instituted by any person or entity, or threatened by any governmental
agency or body, before a court or governmental body, to restrain or prevent the
consummation of the transactions contemplated by, or the performance by the
Shareholders of their respective obligations under, this Agreement or which
seeks other relief with respect to any of such transactions or which could
reasonably be expected to have a materially adverse effect on the businesses,
results of operations, assets, financial condition or prospects of In2itive. At
the Closing Date, there shall be no injunction, restraining order or decree of
any nature of any court or governmental agency or body in effect
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which restrains or prohibits the consummation of the transactions contemplated
by this Agreement.
12.5 Non-Compete Agreements. SPSS and each of the individuals
listed on Schedule 11.5 shall have entered into a Non-Competition Agreement,
substantially in the attached hereto as Exhibit E.
12.6 Legal Opinion. SPSS shall have received the written
opinion, dated the Closing Date, of Mazanti-Andersen & Korso Jensen, counsel to
In2itive, substantially in the form attached hereto as Exhibit F.
12.7 Pooling. SPSS shall have received from KPMG Peat Marwick
LLP a letter dated as of the Closing Date, in form and substance reasonably
acceptable to SPSS, and stating that the transactions to be effected hereunder
may be accounted for as a pooling of interests by SPSS for purposes of its
consolidated financial statements under generally accepted accounting principles
and applicable SEC rules and regulations. No action shall have been taken by any
government authority or any statute, rule, regulation or order, promulgated or
issued by any governmental authority, or any proposal made for any such action
by any governmental authority which is reasonably likely to be put into effect,
that would prevent SPSS from accounting for the transactions contemplated
hereunder as a pooling of interests.
12.8 Shareholder Approval. This Agreement and the Acquisition
shall have been approved and adopted by the consent of the Shareholders in
accordance with the DCA and the Articles of Incorporation and By-laws of
In2itive.
12.9 Affiliates and Certain Stockholders. (a) Prior to the
Closing Date, the Shareholders shall cause In2itive to deliver to SPSS the
Affiliates Letters in form and substance satisfactory to SPSS in its sole
discretion.
12.10 Delivery. At the Closing, the documents referenced in
Section 13.1(a) shall be delivered to SPSS.
ARTICLE XIII
CLOSING DELIVERIES
13.1(a) The following deliveries shall be made to SPSS at
the Closing:
(i) Books and Records. The Shareholders
shall have caused to be delivered to SPSS all of In2itive's
books and records, including without limitation the stock
transfer and minute books and financial records. The
Shareholders shall cause the transfer of the ownership of the
shares of In2itive to SPSS to have been duly registered in the
share register.
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(ii) Legal Opinion. The Shareholders shall
cause to be delivered to SPSS the written legal opinion, dated
the Closing Date, of Mazanti- Andersen, Korso Jensen &
Partners counsel to In2itive, substantially in the form
attached hereto as Exhibit F.
(iii) Consents. The Shareholders shall cause
In2itive to deliver to SPSS all consents and approvals
required in connection with the performance by the
Shareholders of their obligations under this Agreement and the
consummation by the Shareholders of the transactions
contemplated hereby and thereby, including the consent by the
Board of Directors of In2itive to the transfer of the Shares
to SPSS.
(iv) Closing Certificates. The Shareholders
shall deliver, or cause to be delivered, to SPSS closing
certificates in the form attached as Exhibit G hereto, and
such other documents as SPSS and its counsel shall reasonably
request.
(v) Charter; Certificates. The Shareholders
shall cause to be delivered to SPSS the Shares duly endorsed
to SPSS, In2itive's Articles of Incorporation, as amended to
the Closing Date, certified by the Commerce and Companies
Registry and a Certified Copy of Compiled Summary from the
Commerce and Companies Registry and each other jurisdiction in
which In2itive is required to be qualified.
(vi) Affiliate Letters. SPSS shall
have received an executed Affiliate Letter from each In2itive
Affiliate.
(vii) Stock Pledge and Escrow Agreement. The
Shareholders shall have executed and delivered the Stock
Pledge and Escrow Agreement, substantially in t e form
attached hereto as Exhibit H hereto and the Escrowed Shares
shall have been deposited with the Escrow Agent to be held in
escrow pursuant to the provisions of the Stock Pledge and
Escrow Agreement.
(viii) CFMC Compliance. The Shareholders shall
have received and delivered to SPSS evidence that the right of
first refusal to purchase the capital stock of In2itive by
Computers for Marking Corporation, a California corporation
("CFMC") pursuant to that certain Joint Development Agreement
between CFMC and In2itive, has been complied with or waived.
(ix) Performance. The Shareholders hereto
shall have performed in all material respects all covenants
and agreements required by this Agreement to be performed by
them on or before the Closing Date.
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(x) Further Assurances. The Shareholders
shall deliver, or cause to be delivered, all other documents
required to be delivered at the Closing by the other party and
shall take all other actions which the other parties may
reasonably determine necessary or appropriate in order to
consummate fully the transactions contemplated hereby.
13.1(b) The Following deliveries shall be made to
the Shareholders at the Closing:
(i) Legal Opinion. SPSS shall cause to be
delivered to the Shareholders the written legal opinion, dated
the Closing Date, of Ross & Hardies, counsel to SPSS,
substantially in the form attached hereto as Exhibit I.
(ii) Consents. SPSS shall deliver to the
Shareholders the pooling letter referred to in Section 12.8
herein and all consents and approvals required in connection
with the performance by SPSS of its obligations under this
Agreement and the consummation by SPSS of the transactions
contemplated hereby and thereby, including the consent by the
Board of Directors of SPSS to the purchase of the shares of
In2itive.
(iii) Closing Certificates. SPSS shall
deliver, or cause to be delivered, to the Shareholders closing
certificates in the form attached as Exhibit J hereto, the
Restated Certificate of Incorporation of SPSS, By-laws, and
Good Standing Certificate certified by the Secretary of State
of Delaware.
(iv) Affiliate Letters. The Shareholders
shall have received an executed Affiliate Letter from each
SPSS Affiliate.
(v) Stock Pledge and Escrow Agreement. The
Shareholders shall have executed and delivered the Stock
Pledge and Escrow Agreement, substantially in the form
attached hereto as Exhibit H hereto and the Escrowed Shares
shall have been deposited with the Escrow Agent to be held in
escrow pursuant to the provisions of the Stock Pledge and
Escrow Agreement.
(vi) Share Certificates. SPSS shall
deliver, or cause to be delivered, duly issued and signed
share certificates for 90% of the purchase price together with
stock powers in blank.
(vii) Further Assurances. SPSS shall deliver,
or cause to be delivered, all other documents required to be
delivered at the Closing by the other party and shall take all
other actions which the other parties may reasonably determine
necessary or appropriate in order to consummate fully the
transactions contemplated hereby.
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ARTICLE XIV
SURVIVAL AND INDEMNIFICATION
14.1 Survival of Representations and Warranties; Covenants.
Except as otherwise set forth in this Article XIV of this Agreement, all
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the Closing Date until the earlier of the
first anniversary of the Closing Date or the Audit Release Date. All covenants
contained herein shall survive until performed fully.
14.2 Indemnification.
(a) The Shareholders agree to indemnify and hold SPSS and its
affiliates and the respective officers, directors, employees, agents and
representatives of each of the foregoing (collectively, the "Representatives")
harmless from and against any and all costs, expenses, losses, claims, damages,
penalties, fines, liabilities and obligations whenever arising or incurred
(including, without limitation, amounts paid in settlement, costs of
investigation and attorneys' fees and expenses) (individually, a "Loss," and
collectively, "Losses") arising out of or relating to (i) any breach of any
representation or warranty made by the Shareholders (A) set forth herein or in
any related schedule or (B) set forth in any closing certificate or other
document entered into or delivered by In2itive or the Shareholders in connection
with this Agreement; (ii) any breach of any covenant, obligation or agreement of
In2itive or the Shareholders contained in this Agreement, or set forth in any
closing certificate or other document entered into or delivered in connection
with this Agreement; and (iii) any intentional fraud or criminal act on the part
of In2itive or the Shareholders.
(b) Without limitation as to the indemnification set forth in
subparagraph (a) hereof, the Shareholders agree to indemnify and hold SPSS, and
its affiliates and Representatives harmless from and against (i) any Taxes of or
incurred by In2itive for any taxable year or other period the Return for which
was filed or due on or before the Closing Date; (ii) any Taxes incurred by
In2itive for any taxable year or other period ending on or prior to the Closing
Date, the Return for which is filed or due after the Closing Date, to the extent
in excess of the reserve for tax liability (excluding any reserve for deferred
Taxes established to reflect timing differences between book and tax income) as
set forth in its most recent balance sheet contained in the Financial
Statements; (iii) the pro-rata share of any Taxes incurred by In2itive for any
taxable year or other period beginning before and ending after the Closing Date,
to the extent in excess of the reserve for tax liability (excluding any reserve
for deferred taxes established to reflect timing differences between book and
tax income) set forth or included in its most recent balance sheet contained in
the Financial Statements, as adjusted for the passage of time through the
Closing Date in accordance with In2itive's past practice and customs; and (iv)
all Taxes of any corporation other than In2itive which was at any time prior to
the Closing Date a member of an "affiliated group" of corporations that included
In2itive. For purposes of this Subparagraph 14.2(b), in the case of any taxable
period beginning before and ending after the Closing Date, for purposes of
determining the amount of liability for Taxes attributable to the portion of the
taxable
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period ending on or before the Closing Date: (A) in the case of sales, use,
payroll or excise Taxes or Taxes based upon or related to income, such portion
of the taxable period shall be deemed to be a separate taxable year and the
Shareholders' liability shall be determined by taking into account all items of
income, gain, loss, deduction or credit on a basis consistent with that employed
in preparing the federal income tax return of In2itive for the taxable year
ending on the Closing Date and the relevant state or local tax return for prior
years, and (B) in the case of other Taxes, the Shareholders' liability shall
equal a pro-rata portion of the liability for taxes for the entire taxable
period based on the ratio of the number of days from the beginning of such
taxable period through the Closing Date to the total number of days included in
such taxable period.
(c) All Losses payable by the Shareholders to SPSS pursuant to
the indemnities provided in this Agreement shall not aggregate an amount greater
than the Escrow Shares (the "Cap"), except as set forth in this Section 14.2(c).
Except for a claim under Section 4.5(b) hereunder or a claim based on a breach
of a representation or warranty hereunder caused by intentional fraud or
criminal action on the part of a Shareholder, a claim against the Escrowed
Shares shall be the exclusive remedy for SPSS hereunder. Except for a claim
under Section 4.5 hereunder or a claim based on a breach of a representation or
warranty hereunder involving intention fraud or criminal action on the part of a
Shareholder, the indemnity provided in this Agreement shall not apply until the
cumulative amount of all Losses shall exceed one percent (1%) of the Purchase
Price, as measured by multiplying the number of shares issued pursuant to this
Agreement times the closing price for SPSS on the Closing Date, in the aggregate
(the "Basket"). If the Basket is exceeded, SPSS shall be entitled to the excess,
if any, of the full amount of all such claims over the Basket, subject to the
Cap. Notwithstanding any other provision of this Agreement, in no event shall
the amount of Losses for which SPSS is indemnified by any Shareholder pursuant
to Section 4.5 hereof or for which SPSS is indemnified by any Shareholder and
which result from a breach of a representation or warranty caused by intentional
fraud or criminal action by another Shareholder (but not the indemnifying
Shareholder) exceed the purchase price paid by SPSS to such Shareholder
hereunder, less any other Losses for which SPSS is indemnified by such
Shareholder under this Agreement (but not subtracting the amount of Losses
resulting from a breach of a representation or warranty involving intentional
fraud or criminal action by such Shareholder).
If a claim for breach of a representation or warranty on the
part of the Shareholder or Shareholders is based on intentional fraud or
criminal action and is made against a Shareholder or Shareholders of In2itive
(the "Defrauding Shareholder") by SPSS, the Defrauding Shareholder which has
engaged in such intentional fraud or criminal action shall indemnify and hold
SPSS and its Representatives harmless from and against all Losses resulting from
such breach of a representation or warranty caused by intentional fraud or
criminal action by the Defrauding Shareholder without regard to the Basket or
the Cap, and SPSS agrees to claim first against the Defrauding Shareholder to
recoup its Losses. If the amount of the Losses resulting from the breach of a
representation or warranty caused by intentional fraud or criminal action by the
Defrauding Shareholder exceeds the amount for which SPSS and its Representative
have recouped from the Defrauding Shareholder and its Representatives, then each
other Shareholder shall be
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responsible for its pro rata share of the remainder of such Losses on a pro-rata
basis up to a maximum of the purchase price paid by SPSS to such Shareholder
(its pro rata share of the Purchase Price) less such Shareholder's share of any
other Losses (except for the amount of Losses resulting from a breach of any
other representation or warranty involving intentional fraud or criminal action
by such Shareholder) for which SPSS is indemnified by such Shareholder under
this Agreement (the "Fraud Cap"). Notwithstanding anything contained or implied
in this Agreement, the indemnity obligations set forth hereinabove in this
paragraph shall survive the Closing without limitation except as provided by the
applicable statute of limitations (including any extension of said statute of
limitations); provided, however that the indemnity obligations of 2M Invest A/S
and Dansk Erhvervsinvestering A/S set forth in this paragraph shall only survive
until the second anniversary date of the Closing Date.
(d) Any indemnification payment made pursuant to Article XIV
of this Agreement shall be adjusted to reflect any tax benefit or liability
gained or incurred as a result of such indemnification payment.
14.3 Indemnification by SPSS. SPSS agrees to indemnify and
hold the shareholders and its affiliates and the respective managers, directors,
employees, agents and representatives of each of the foregoing harmless from and
against any and all Losses relating to (i) any breach of any representation or
warranty of SPSS set forth herein or in any related schedule, or set forth in
any closing certificate or other document entered into or delivered by SPSS in
connection with this Agreement; (ii) any breach of any covenant, obligation or
agreement of SPSS contained in this Agreement or in any other closing document
and (iii) any fraudulent representation or intentional misrepresentation on the
part of SPSS, unless the claim intentional cause of action with respect thereto
arises out of or is related to actions or omissions of In2itive or the
Shareholders prior to the Closing Date.
14.4 Indemnification Procedure.
(a) An indemnified party under this Article XIV shall give
prompt written notice to the indemnifying party (when and to the extent that the
indemnified party has actual knowledge thereof) of any condition, event or
occurrence (including without limitation the commencement of any audit
proceeding, the notice of non-filing of returns, the notice of non-payment of
tax, or any other similar action or notice by any federal, state or other taxing
authority) or the commencement of any action, suit or proceeding for which
indemnification may be sought, and through counsel reasonably satisfactory to
the indemnified party, shall assume the defense thereof or other indemnification
obligation with respect thereto; provided, however, that any indemnified party
shall be entitled to participate in any such action, suit or proceeding with
counsel of its own choice but at its own expense; and provided, further, that
any indemnified party shall be entitled to participate in any such action, suit
or proceeding with counsel of its own choice at the expense of the indemnifying
party, if, under applicable canons of ethics, joint representation of the
indemnifying party and the indemnified party presents a conflict of interest.
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In any event, if the indemnifying party fails to assume the
defense within a reasonable time, the indemnified party may assume such defense
or other indemnification obligation and the reasonable fees and expenses of its
attorneys will be covered by the indemnity provided for hereunder. No action,
suit or proceeding for which indemnification may be sought shall be compromised
or settled in any manner which might adversely affect the interests of the
indemnifying party without the prior written consent of the indemnifying party
(which shall not be unreasonably withheld); provided, however, that the
indemnified party may settle any claim or cause of action without the
indemnifying party's consent, but in such case the indemnifying party shall not
be required to reimburse the indemnified party for its Losses except and to the
extent that a court of competent jurisdiction finally determines on appeal that
indemnifying party must indemnify the indemnified party therefor.
Notwithstanding anything in this Section 14.4 to the contrary, the indemnifying
party shall not, without the prior written consent of the indemnified party, (i)
settle or compromise any action, suit or proceeding or consent to the entry of
any judgment which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the indemnified party of a written
release from all liability in respect of such action, suit or proceeding or (ii)
settle or compromise any action, suit or proceeding in any manner that may
materially and adversely affect the indemnified party other than as a result of
money damages or other money payments. The indemnifying party shall pay all
expenses, including attorneys' fees, that may be incurred by any indemnified
party in enforcing the indemnity provided for hereunder.
(b) In the case of any proposed or actual assessment of tax
liabilities for which SPSS is entitled to indemnification from the Shareholders
as provided in Section 14.2(b). SPSS shall give written notice to the
Shareholders as provided in subparagraph (a) hereof and shall contest such
proposed or actual assessment through the administrative review or appeal
procedures available under the relevant tax laws and regulations, provided,
however, that SPSS shall not be required to contest such proposed or actual
assessment unless the Shareholders shall first provide an opinion of counsel,
reasonably acceptable to SPSS, stating that the Shareholders have a reasonable
basis for their position. SPSS shall keep the Shareholders fully informed as to
the progress of such contest. If at any point prior to the termination of the
administrative review process, the Shareholders notify SPSS in writing that they
are willing to accept a settlement proposed by the IRS with respect to such
proposed or actual assessment of tax liabilities, SPSS will settle the proposed
or actual tax assessment, and SPSS shall immediately be entitled to
indemnification from the Shareholders. If the Shareholders never elect to
request SPSS to settle and such administrative review process is unsuccessful at
eliminating the proposed tax, SPSS shall be entitled to pay the tax (and any
penalties and interest) and be entitled to indemnification from the
Shareholders; provided, that if within ten (10) days of receipt from SPSS of
notice that it is paying the tax, the Shareholders notify SPSS of their desire
to contest the proposed or assessed tax deficiency in the courts, the
Shareholders shall be entitled to do so provided that (a) if the proposed or
actual tax deficiency is contested in tax court, the Shareholders shall pay from
their own sources any amount of taxes, penalties and interest determined to be
due and (b) if the proposed or actual tax deficiency is contested by suit for
refund in any other court, funds shall be provided to SPSS and SPSS shall pay
the tax and if the outcome of the contest determines that the tax paid should be
refunded, such refund shall be
39
<PAGE>
returned to the Shareholders. Any post-administrative review contest shall be
conducted at the sole cost and expense of the Shareholders.
14.5 Arbitration. Any dispute as to any claims under this
Agreement shall be settled by binding arbitration in the City of Chicago,
Illinois by three arbitrators, one of whom shall be appointed by the
Shareholders, one by SPSS and the third of whom shall be appointed by the first
two arbitrators. If either party fails to appoint an arbitrator within 20 days
of a request in writing by the other party to do so or if the first two
arbitrators cannot agree on the appointment of a third arbitrator within 20 days
of their designation, then such arbitrator shall be appointed by the Chief Judge
of the United States District Court for the Northern District of Illinois.
Except as to the selection of arbitrators which shall be as set forth above, the
arbitration shall be conducted promptly and expeditiously in accordance with the
commercial arbitration rules of the American Arbitration Association so as to
enable the arbitrators to render an award within 90 days of the commencement of
the arbitration proceedings. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. Each party shall bear
the expenses of its arbitrator and shall jointly and equally share with the
other the expenses for the third arbitrator and the arbitration.
14.6 Treatment as Adjustment of Acquisition Price. Any
indemnity payment received by a party hereunder shall be treated as an
adjustment of the acquisition price.
ARTICLE XV
TERMINATION, AMENDMENT AND WAIVER
Termination. This Agreement may be terminated at
any time prior to the Closing Date, whether before or after approval by the
Shareholders of In2itive:
(a) by the Board of Directors of SPSS;
(b) by the Shareholders or SPSS if a material breach
of any provision of this Agreement has been committed and such breach
is not waived;
(c) by SPSS, if the conditions set forth in Section XI hereof
shall not have been complied with or performed in any material respect
and such noncompliance or nonperformance shall not have been cured or
eliminated (or by its nature cannot be cured or eliminated) by In2itive
on or before November 30, 1997; or
(d) by the Shareholders, if the conditions set forth in
Section XI hereof shall not have been complied with or performed in any
material respect and such noncompliance or nonperformance shall not
have been cured or eliminated (or by its nature cannot be cured or
eliminated) by SPSS or before November 30, 1997; or
40
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(e) by either SPSS or the Shareholders if the Acquisition
shall not have been consummated on or before November 30, 1997 or such
later date as the parties hereto agree in writing.
15.2 Effect of Termination. In the event of termination of
this Agreement as provided above, this Agreement shall hereafter become void and
there shall be no liability or further obligation on the part of the
Shareholders or SPSS or their respective officers, managers or directors, except
as set forth in Section 10.1 and Section 16.3 and except that nothing herein
will relieve any party from liability for breach of this Agreement.
ARTICLE XVI
MISCELLANEOUS
16.1 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented by written
agreement of the parties.
16.2 Waiver of Compliance. Any failure of the Shareholders on
the one hand, or SPSS, on the other, to comply with any obligation herein may be
expressly waived hereunder, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Any waiver must be in
writing and duly executed by the appropriate parties.
16.3 Expenses. Whether or not the transactions contemplated by
this Agreement shall be consummated, the parties hereto agree that all fees and
expenses incurred by In2itive or the Shareholders, on the one hand, and SPSS, on
the other, in connection with this Agreement, and the transactions and other
actions contemplated thereby or taken in connection therewith, shall be borne by
the Shareholders, and by SPSS, respectively, including, without limitation, all
fees of counsel and accountants, provided, however, the Shareholders and SPSS
agree to each pay one-half of any assessed Danish stock transfer tax due upon
completion of the Acquisition, SPSS agrees to pay fees incurred by In2itive to
KPMG Peat Marwick for the audit of In2itive financials, if required, and the
Total Shares shall be reduced accordingly. Payment of the fees and expenses
incurred by the In2itive Shareholders not exceeding $99,163 shall be made by
SPSS, and the Total Shares shall be reduced in accordance with Section 1.2
hereof.
16.4 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or by facsimile
transmission (receipt confirmed), one day after being sent by recognized
overnight courier or delivery service, freight prepaid, or five days after being
mailed, certified or registered mail, postage prepaid, return receipt requested:
41
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(a) If to the Shareholders to:
Ole Stangegaard
In2itive Technologies, AS
Roejelskaer 11
DK-2840 Holte, Copenhagen, Denmark
Facsimile Number: 45 45 41 15 45
with a copy to:
Mazanti-Andersen, Korso Jensen & Brothers
Store Kongensgade 69
1264 Copenhagen, Denmark
Attention: Georg Dedichen
Facsimile Number: 011 45 33 111073
or to such other person or address as In2itive or the Shareholders
shall furnish to SPSS in writing by notice given in the manner set
forth in (a) above.
(b) If to SPSS to:
SPSS Inc.
444 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Edward Hamburg
Facsimile Number: (312) 329-3558
with a copy to:
Ross & Hardies
150 North Michigan Avenue, Suite 2500
Chicago, Illinois 60601
Attention: T. Stephen Dyer, Esq.
Facsimile Number: (312) 750-8600
or to such other person or address as SPSS shall furnish to In2itive in writing
by notice given in the manner set forth above.
16.5 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties, except by operation of law and except that SPSS may assign its rights
and obligations under this Agreement to any other entity wholly owned by SPSS.
If such assignment
42
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shall be made by SPSS, the assignee shall be entitled to all of the rights and
shall assume all of the obligations of SPSS hereunder, provided, that SPSS shall
remain liable for and guarantee the performance of such entity's obligations
under this Agreement.
16.6 Publicity. In2itive nor the Shareholders, nor SPSS shall
make or issue, or cause to be made or issued, any announcement or written
statement concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public, without the prior written consent of the
other parties. This provision shall not apply, however, to any announcement or
written statement required to be made by law, the regulations of any federal or
state governmental agency or any stock exchange, except that the party required
to make such announcement shall, whenever practicable, consult with the other
party concerning the timing and content of such announcement before such
announcement is made.
16.7 Headings. The Article and Section headings contained in
this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
16.8 Severability. If any provision of this Agreement shall be
determined to be contrary to law and unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with their
terms.
16.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois of the United
States of America, without regard to its conflicts of law doctrine. The parties
hereto expressly submit themselves to the non-exclusive jurisdictions of the
State and Federal Courts of the Northern District of Illinois for the resolution
of any disputes which may arise under or with respect to compliance with this
Agreement.
16.10 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
16.11 Third Parties. Nothing herein shall be construed to
confer upon or give to any party other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
16.12 References to Laws. References to particular statutes
within this Agreement, to the extent such references relate to laws other than
the laws of the United States or any particular State thereof, are intended to
refer, and shall be construed as referring, to laws of Denmark.
16.13 Entire Agreement. This Agreement, including the
Exhibits and Schedules hereto, sets forth the entire agreement and understanding
of the parties hereto in respect
43
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of the subject matter contained herein, and supersedes all prior agreements,
covenants, representations or warranties, whether oral or written, by any party
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first written above.
SPSS INC.
/s/ Edward Hamburg
By: Edward Hamburg
Title: Executive Vice President
Corporate Operations and Chief
Executive Officer
SHAREHOLDERS:
/s/ Jens Nielsen /s/ Bjorn Haugland
- ----------------------------- ----------------------------
Jens Nielsen Bjorn Haugland
/s/ Soren Brunn,
/s/ Henrik Rosendahl as power of attorney
- ----------------------------- ----------------------------
Henrik Rosendahl 2M Invest
By:
Its:
/s/ Ole Stangegaard,
/s/ Ole Stangegaard as power of attorney
- ----------------------------- ----------------------------
Ole Stangegaard Peter Tottrup
/s/ Ole Stangegaard,
/s/ Lars Thinggard as power of attorney
- ----------------------------- ----------------------------
Lars Thinggaard Steen Hansen
/s/ Ole Stangegaard,
/s/ Edward O'Hara as power of attorney
- ----------------------------- ----------------------------
Edward O'Hara Magnus Egholm
/s/ Ole Stangegaard, /s/ Ole Stangegaard,
as power of attorney as power of attorney
- ----------------------------- ----------------------------
Mikkel Jorgensen Michael Elbaek Bertelsen
/s/ Ole Stangegaard, /s/ Ole Stangegaard,
as power of attorney as power of attorney
- ----------------------------- ----------------------------
Bjarne Jensen Thomas Leistiko
/s/ Ole Stangegaard, /s/ Ole Stangegaard,
as power of attorney as power of attorney
- ----------------------------- ----------------------------
Dansk Erhvervsinvestering Dorte Siggaard Andersen
By:
44
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/s/ Ole Stangegaard, /s/ Ole Stangegaard,
as power of attorney as power of attorney
- ----------------------------- ----------------------------
MSP Finans 2 ApS Hans Chr. Iversen
45
<PAGE>
THE SHAREHOLDERS' REPRESENTATIVE HEREBY ACCEPTS AND AGREES TO THE DUTIES AND
OBLIGATIONS SET FORTH HEREIN.
/s/ Ole Stangegaard
- -----------------------------
Ole Stangegaard, as Shareholders' Representative
46
<PAGE>
TABLE OF CONTENTS
ARTICLE I - TERMS OF PURCHASE AND SALE........................................ 1
1.1 Purchase and Sale of the Shares............................. 1
1.2 Payment of Purchase Price................................... 1
1.3 Closing..................................................... 2
1.4 Tax and Accounting.......................................... 2
ARTICLE II SHAREHOLDERS' REPRESENTATIVE....................................... 2
ARTICLE III ESCROW............................................................ 4
3.1 Escrow...................................................... 4
3.2 Escrowed Shares............................................. 4
ARTICLE IV SECURITIES MATTERS................................................. 4
4.1 Registration of SPSS Common Stock........................... 4
4.2 Sales of SPSS Common Stock by Shareholders.................. 6
4.3 Registration Expenses....................................... 6
4.4 Restricted Stock............................................ 6
4.5 Indemnification ............................................ 7
4.6 Additional Obligations of SPSS.............................. 9
4.7 Reports Under the Exchange Act.............................. 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS..................10
5.1 Organization and Qualification..............................10
5.2 Authority...................................................10
5.3 Capitalization..............................................11
5.4 Title to Shares.............................................11
5.5 Consents and Approvals......................................12
5.6 Absence of Conflicts........................................12
5.7 Financial Statements; Accounts Receivable...................12
5.8 Absence of Undisclosed Liabilities; Warranties in Connection
with Software Products......................................12
5.9 Absence of Certain Changes or Events........................13
5.10 Investment in the SPSS Common Stock.........................14
5.11 Real and Personal Property; Inventories.....................15
5.12 Patents, Trademarks, Etc....................................15
5.13 Employees...................................................16
5.14 Contracts and Commitments...................................16
5.15 Source Code.................................................17
5.16 Government Contracts........................................17
5.17 Insurance...................................................17
5.18 Litigation and Administrative Proceedings...................17
5.19 Tax Matters.................................................18
i
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5.20 Compliance with Laws........................................19
5.21 Environmental and Safety Matters............................19
5.22 Employee Benefits...........................................20
5.23 Licenses and Permits........................................20
5.24 Relations With Suppliers and Customers......................20
5.25 Interests in Competitors, Suppliers and Customers...........20
5.26 Employment Matters..........................................20
5.27 Related Transactions........................................21
5.28 Brokers and Finders.........................................21
5.29 Questionable Payments.......................................21
5.30 Books and Records...........................................21
5.31 Bank Accounts; Safe Deposit Boxes...........................21
5.32 Full Disclosure.............................................21
5.33 Effect of Certificates......................................22
5.34 Accounting Matters..........................................22
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SPSS.............................22
6.1 Organization and Qualification. ............................22
6.2 Authority...................................................22
6.3 Consents and Approvals......................................22
6.4 Absence of Conflicts........................................23
6.5 Capitalization..............................................23
6.6 Reports and Financial Statement.............................23
6.7 Litigation and Administrative Proceedings. ................24
6.8 Brokers and Finders.........................................24
6.9 SPSS Common Stock...........................................24
6.10 Effect of Certificates......................................24
6.11 Pooling of Interests Accounting.............................24
6.12 Dividends and Distributions.................................24
6.13 Marketable Title............................................24
6.14 Reliance on Responses.......................................24
ARTICLE VII COVENANTS RELATING TO CONDUCT OF BUSINESS.........................25
7.1 Conduct of Business.........................................25
ARTICLE VIII COVENANTS OF THE SHAREHOLDERS....................................27
8.1 Consents and Approvals......................................27
8.2 Closing Tax.................................................28
8.3 Access to Information.......................................28
8.4 Affiliates and Certain Stockholders.........................28
8.5 Further Assurances..........................................29
ARTICLE IX COVENANTS OF SPSS..................................................29
9.1 Retention of Records........................................29
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9.2 Severance Packages..........................................29
9.3 Further Assurances..........................................29
9.4 Affiliates and Certain Stockholders.........................29
ARTICLE X MUTUAL COVENANTS....................................................30
10.1 Confidentiality.............................................30
10.2 Consistent Tax Reporting....................................30
10.3 Cooperation.................................................31
ARTICLE XI CONDITIONS TO OBLIGATIONS .........................................31
11.1 Representations and Warranties..............................31
11.2 Performance.................................................31
11.3 Filings; Consents; Waiting Periods..........................31
11.4 No Injunction...............................................31
11.5 Pooling.....................................................31
11.6 Delivery....................................................32
11.7 Legal Opinion...............................................32
ARTICLE XII CONDITIONS TO OBLIGATIONS OF SPSS.................................32
12.1 Representations and Warranties..............................32
12.2 Performance.................................................32
12.3 Filings; Consents; Waiting Periods..........................32
12.4 No Litigation...............................................32
12.5 Non-Compete Agreements......................................33
12.6 Legal Opinion...............................................33
12.7 Pooling.....................................................33
12.8 Shareholder Approval........................................33
12.9 Affiliates and Certain Stockholders.........................33
12.10 Delivery....................................................33
ARTICLE XIII CLOSING DELIVERIES...............................................33
13.1 Books and Records...........................................33
13.2 Legal Opinion...............................................34
13.3 Consents....................................................34
13.4 Closing Certificates........................................34
13.5 Charter; Certificates.......................................34
13.6 Affiliates Letters..........................................34
13.7 Stock Pledge and Escrow Agreement...........................34
13.8 Resignations of In2itive's Managers and Directors...........34
13.9 CFMC Compliance.............................................34
13.10 Performance.....................................34
13.11 Further Assurances..............................35
ARTICLE XIV SURVIVAL AND INDEMNIFICATION......................................36
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14.1 Survival of Representations and Warranties; Covenants.......36
14.2 Indemnification.............................................36
14.3 Indemnification by SPSS.....................................38
14.4 Indemnification Procedure...................................38
14.5 Arbitration.................................................40
14.6 Treatment as Adjustment of Acquisition Price................40
ARTICLE XV TERMINATION, AMENDMENT AND WAIVER..................................40
15.1 Termination.................................................40
15.2 Effect of Termination.......................................41
ARTICLE XVI MISCELLANEOUS.....................................................41
16.1 Amendment and Modification..................................41
16.2 Waiver of Compliance........................................41
16.3 Expenses....................................................41
16.4 Notices.....................................................41
16.5 Assignment..................................................42
16.6 Publicity...................................................43
16.7 Headings....................................................43
16.8 Severability................................................43
16.9 Governing Law...............................................43
16.10 Counterparts................................................43
16.11 Third Parties...............................................43
16.12 References to Laws..........................................43
16.13 Entire Agreement............................................43
iv
EXHIBIT 5.1
November 26, 1997
SPSS INC.
444 N. Michigan Avenue
Chicago, Illinois 60611
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
You have requested our opinion with respect to the offering and sale
of Common Stock pursuant to a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), of up to an aggregate of 1,031,951 shares of Common Stock, $.01 par
value per share (the "Common Stock") of SPSS Inc. (the "Corporation").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed relevant and necessary to
form a basis for the opinions hereinafter expressed. In conducting such
examination, we have assumed (i) that all signatures are genuine, (ii) that all
documents and instruments submitted to us as copies conform with the originals,
and (iii) the due execution and delivery of all documents where due execution
and delivery are a prerequisite to the effectiveness thereof. As to any facts
material to this opinion, we have relied upon statements and representations of
officers and other representatives of the Corporation and certificates of public
officials and have not independently verified such facts.
Based upon the foregoing, it is our opinion that the Common Stock is
legally issued, fully paid and non-assessable.
We express no opinion as to the laws of any jurisdiction other than
the State of Illinois, the United States of America, and, solely with respect to
matters of corporate organization and authority, the General Corporation Law of
the State of Delaware. We are not admitted to the practice of law in the State
of Delaware. Insofar as the foregoing opinion relates to matters that would be
controlled by the substantive laws of any jurisdiction other than the United
States of America, the General Corporation Law of the State of Delaware (with
respect to matters of corporate organization and authority) or the State of
Illinois, we have assumed that the substantive laws of such jurisdiction conform
in all respects to the internal laws of the State of Illinois.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement relating to the registration of 1,031,951 shares of
Common Stock and to the use of our name as your counsel in connection with the
Registration Statement and in the Prospectus forming a part thereof.
Very truly yours,
ROSS & HARDIES
By: /s/ T. Stephen Dyer
A Partner
- 28 -
EXHIBIT 15.1
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
The Board of Directors
SPSS Inc.:
With respect to the subject registration statement on Form S-3, we
acknowledge our awareness of the incorporation by reference therein of our
reports dated April 29, 1997, July 29, 1997, and October 29, 1997, related to
our reviews of interim financial information as of March 31, 1997, June 30,
1997, and September 30, 1997, respectively, which reports appear in the
quarterly reports on Form 10-Q of SPSS Inc. for the quarters ended March 31,
1997, June 30, 1997, and September 30, 1997, respectively, incorporated by
reference therein.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports
are not considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of sections 7 and 11 of the Act.
/s/ KPMG PEAT MARWICK LLP
Chicago, Illinois
November 26, 1997
- 29 -
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
SPSS Inc.:
We consent to incorporation by reference in the registration statement
on Form S-3 of SPSS Inc. of our audit report dated February 19, 1997, relating
to the consolidated balance sheets of SPSS Inc. and subsidiaries as of December
31, 1996 and 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996, and the related schedule, which report appears
in the December 31, 1996 annual report on Form 10-K of SPSS Inc.
/s/ KPMG PEAT MARWICK LLP
Chicago, Illinois
November 26, 1997
- 30 -
